Financial Performance - The Cato Corporation reported a net loss of $15.1 million or ($0.79) per diluted share for Q3 2024, compared to a net loss of $6.1 million or ($0.30) per diluted share for Q3 2023[3]. - For the nine months ended November 2, 2024, the company reported a net loss of $4.0 million or ($0.24) per diluted share, compared to a net loss of $0.5 million or ($0.02) per diluted share for the same period in 2023[5]. Sales Performance - Sales for Q3 2024 were $144.6 million, an 8% decrease from $156.7 million in Q3 2023, with same-store sales down 3%[4]. - Year-to-date sales were $486.8 million, an 8% decrease from $528.2 million in the prior year, with same-store sales down 4%[5]. Cost and Margin Analysis - Gross margin decreased from 32.5% to 28.8% of sales in Q3 2024 due to higher markdowns and increased freight, distribution, and occupancy costs[6]. - Year-to-date gross margin decreased to 33.3% from 34.6% in the prior year, primarily due to increased occupancy, freight, and distribution costs[7]. - SG&A expenses as a percentage of sales increased from 39.4% to 40.0% in Q3 2024, primarily due to payroll cost deleveraging[6]. Operational Changes - The company opened one store in Q3 2024, resulting in a total of 1,167 stores as of November 2, 2024, down from 1,245 stores a year earlier[8]. Challenges and Outlook - The company is facing challenges in Q4 2024 due to supply chain issues and higher costs associated with moving inventory[6]. - Tax expense for Q3 2024 was $0.3 million compared to a tax benefit of $4.3 million in the prior year, mainly due to valuation allowances against net deferred tax assets[6].

Company Summary - The Cato Corporation has suspended its regular quarterly dividend due to current economic conditions and sales trends [1] Industry Context - The suspension of dividends reflects broader economic challenges that may impact consumer confidence and discretionary spending [2]

Core Points - The Cato Corporation reported a net loss of $15.1 million or ($0.79) per diluted share for Q3 2024, compared to a net loss of $6.1 million or ($0.30) per diluted share for Q3 2023 [1][3] - Sales for Q3 2024 were $144.6 million, an 8% decrease from $156.7 million in Q3 2023, with same-store sales down 3% [2][4] - For the nine months ended November 2, 2024, the company reported a net loss of $4.0 million or ($0.24) per diluted share, compared to a net loss of $0.5 million or ($0.02) per diluted share for the same period in 2023 [3][5] Financial Performance - Gross margin for Q3 2024 decreased to 28.8% from 32.5% in Q3 2023, attributed to higher markdowns and increased freight, distribution, and occupancy costs [4][5] - Selling, general and administrative (SG&A) expenses as a percentage of sales increased from 39.4% to 40.0% during Q3 2024, primarily due to payroll cost deleveraging [4][5] - Year-to-date gross margin decreased to 33.3% from 34.6% in the prior year, with SG&A rate at 35.5% compared to 35.1% [5] Operational Insights - The company opened one store in Q3 2024, with a total of 1,167 stores as of November 2, 2024, down from 1,245 stores a year earlier [6] - The decline in sales was influenced by three major hurricanes, supply chain issues, and negative pressure on customers' disposable income [4] - The company is managing SG&A expenses and inventory levels in line with current sales trends, but anticipates continued challenges in Q4 2024 [4] Market Position - The Cato Corporation operates as a specialty retailer of value-priced fashion apparel and accessories under three concepts: "Cato," "Versona," and "It's Fashion" [7] - The company offers exclusive merchandise comparable to mall specialty stores at low prices, targeting value-conscious consumers [7]

Sales Performance - Total retail sales for Q2 2024 were $166.9 million, an 8% decrease from $181.2 million in Q2 2023, primarily due to a 2% decrease in same-store sales and store closures [55]. - For the first six months of fiscal 2024, total retail sales were $342.2 million, down 8% from $371.5 million in the same period last year, driven by a 4% decrease in same-store sales [55]. Store Operations - The company operated 1,166 stores as of August 3, 2024, down from 1,247 stores a year earlier, with plans to close approximately 65 stores in total during fiscal 2024 [56]. Cost and Expenses - Cost of goods sold for Q2 2024 was $109.1 million, or 65.4% of retail sales, compared to $117.6 million, or 64.9% of retail sales in Q2 2023 [58]. - Selling, general and administrative expenses (SG&A) were $58.2 million, or 34.9% of retail sales in Q2 2024, down from $61.6 million, or 34.0% of retail sales in Q2 2023 [59]. Income and Tax - Net income for Q2 2024 was $0.2 million, or 0.1% of total revenues, compared to $1.2 million, or 0.6% in Q2 2023 [51]. - Income tax expense for Q2 2024 was $0.6 million, down from $1.3 million in Q2 2023, with an effective tax rate of 10.5% compared to 38.5% in the prior year [62]. Other Income and Revenue - Interest and other income increased to $1.7 million, or 1.0% of retail sales in Q2 2024, from $1.3 million, or 0.7% in Q2 2023, primarily due to higher interest earned on investments [61]. - Other revenue for the first six months of fiscal 2024 was $3.5 million, slightly up from $3.4 million in the same period last year, driven by increases in gift card breakage income and finance charges [57]. Financial Position - Cash provided by operating activities decreased to $8.8 million in the first six months of fiscal 2024 from $21.6 million in the same period of fiscal 2023, a decline of $12.8 million [64]. - Working capital increased to $69.9 million as of August 3, 2024, up from $55.1 million at February 3, 2024, primarily due to a decrease in current lease liability and an increase in cash [64]. Capital Expenditures - Expenditures for property and equipment totaled $4.8 million in the first six months of fiscal 2024, down from $8.5 million in the same period last year [66]. Cash Flow Activities - Net cash provided by investing activities was $6.7 million in the first six months of fiscal 2024, compared to $23.8 million in the same period of 2023, reflecting higher purchases of short-term investments [67]. - Net cash used in financing activities totaled $9.1 million in the first six months of fiscal 2024, slightly down from $9.3 million in the comparable period of fiscal 2023 [67]. Dividends and Credit Facilities - The Company maintained a quarterly dividend of $0.17 per share as of August 29, 2024 [67]. - The Company has an unsecured revolving credit agreement allowing borrowings of up to $35.0 million, with no outstanding borrowings as of August 3, 2024 [65]. Investment Portfolio - The investment portfolio primarily consists of corporate bonds and government debt securities rated A or better, with maturities ranging from six days to 2.9 years [69]. Deferred Compensation - Deferred compensation plan assets increased to $8.9 million as of August 3, 2024, up from $8.6 million at February 3, 2024 [70]. Economic Environment - The company experienced inflationary cost pressures and high interest rates, negatively impacting consumer behavior and disposable income in the first half of fiscal 2024 [53]. - Merchandise supply chain disruptions, including reduced transits through the Panama Canal and increased shipping costs due to regional hostilities, have negatively impacted operations [54].

Financial Performance - Net income for Q2 2024 was $0.1 million or $0.01 per diluted share, down from $1.1 million or $0.06 per diluted share in Q2 2023[1] - For the six months ended August 3, 2024, net income increased to $11.1 million or $0.54 per diluted share, compared to $5.6 million or $0.27 per diluted share in the same period last year[2] Sales and Revenue - Sales for Q2 2024 were $166.9 million, an 8% decrease from $181.2 million in Q2 2023, attributed to closed stores and a 2% same-store sales decline[1] - Year-to-date sales were $342.2 million, an 8% decrease from $371.5 million for the same period in 2023, with a 4% same-store sales decline[2] Cost and Expenses - Gross margin for Q2 2024 decreased to 34.6% from 35.1% in Q2 2023, primarily due to higher distribution costs[2] - SG&A expenses as a percentage of sales increased to 34.9% in Q2 2024 from 34.0% in Q2 2023, despite a $3.4 million reduction in total SG&A expenses[2] Store Operations - The company closed five stores in Q2 2024, reducing the total number of stores to 1,166 from 1,247 in the previous year[4] Assets and Liabilities - Current assets as of August 3, 2024, totaled $243.5 million, slightly up from $243.1 million as of February 3, 2024[7] - Total liabilities decreased to $122.5 million from $126.9 million since February 3, 2024[7] Market Outlook - The company expects the sales environment to remain challenging in the second half of the year due to negative pressure on discretionary spending[2]

Core Insights - Cato Corporation reported a significant decline in earnings per share (EPS) for Q2 2024, falling to 1 cent from 6 cents in Q2 2023, alongside an 8% decrease in revenues to $166.9 million from $181.2 million [1][2] Financial Performance - The decline in net income and sales was primarily driven by store closures and weakened consumer demand, reflecting ongoing challenges in maintaining sales momentum [2] - Income before income taxes decreased sharply to $0.7 million from $2.5 million in the same quarter last year [6] - Net income for Q2 2024 was $0.1 million, down from $1.1 million in Q2 2023 [7] Cost Management - Gross margin decreased to 34.6% from 35.1% year-over-year, mainly due to higher distribution costs and the deleveraging of occupancy and buying costs, despite some improvement in merchandise margins [4] - Selling, General and Administrative (SG&A) expenses as a percentage of sales increased to 34.9% from 34%, although total SG&A expenses decreased to $58.2 million from $61.6 million due to reductions in payroll and other costs [5] Balance Sheet Overview - As of August 3, 2024, cash and cash equivalents increased to $30.8 million from $23.9 million on February 3, 2024, while total assets decreased to $455.6 million from $486.8 million [8] - Lease liabilities fell to $123.4 million from $153.1 million, and stockholders' equity slightly increased to $195.1 million from $192.3 million [8] Operational Adjustments - Cato Corporation closed five stores during the second quarter, reducing its total store count to 1,166 across 31 states, down from 1,247 stores as of July 29, 2023, as part of a strategy to streamline operations and improve profitability [8]

Cato (NYSE:CATO) just reported results for the second quarter of 2024. Cato reported earnings per share of 1 cent. The company reported revenue of $168.63 million. InvestorPlace Earnings is a project that leverages data from TradeSmith to automate coverage of quarterly earnings reports. InvestorPlace Earnings distills key takeaways including earnings per share and revenue, as well as how a company stacks up to analyst estimates. These articles are published without human intervention, allowing us to inform ...

Core Viewpoint - The Cato Corporation reported a decline in net income and sales for the second quarter of 2024, primarily due to store closures and decreased same-store sales, indicating ongoing challenges in the retail environment. Financial Performance - For the second quarter ended August 3, 2024, net income was $0.1 million or $0.01 per diluted share, down from $1.1 million or $0.06 per diluted share in the same quarter of 2023 [1][9]. - Sales for the second quarter were $166.9 million, an 8% decrease from $181.2 million in the prior year, attributed to closed stores and a 2% decline in same-store sales [2][9]. - Year-to-date net income for the six months ended August 3, 2024, was $11.1 million or $0.54 per diluted share, compared to $5.6 million or $0.27 per diluted share for the same period in 2023 [3][9]. - Year-to-date sales were $342.2 million, an 8% decrease from $371.5 million in the previous year, primarily due to closed stores and a 4% decline in same-store sales [3][9]. Cost and Margin Analysis - Gross margin for the second quarter decreased from 35.1% to 34.6% of sales, impacted by higher distribution costs and deleveraging of occupancy and buying costs, partially offset by higher merchandise margins [4][5]. - Selling, general and administrative (SG&A) expenses as a percentage of sales increased from 34.0% to 34.9% during the quarter, primarily due to payroll cost deleveraging, although total SG&A expenses were $3.4 million lower than the previous year [4][5]. - Year-to-date gross margin decreased from 35.5% to 35.2%, with SG&A expenses at 33.6% compared to 33.3% in the prior year, reflecting similar trends in cost management [5]. Store Operations - The company closed five stores during the second quarter, resulting in a total of 1,166 stores in 31 states as of August 3, 2024, down from 1,247 stores in the same period of the previous year [6][9]. Company Overview - The Cato Corporation operates as a specialty retailer of value-priced fashion apparel and accessories under three concepts: "Cato," "Versona," and "It's Fashion," offering exclusive merchandise at competitive prices [7].

NOTE 10 – COMMITMENTS AND CONTINGENCIES: Although such litigation is routine and incidental to the conduct of the Company's business, as with any business of its size with a significant number of employees and significant merchandise sales, such litigation could result in large monetary awards. Based on information currently available, management does not believe that any reasonably possible losses arising from current pending litigation will have a material adverse effect on its condensed consolidated fina ...

EXHIBIT 99.1 NEWS RELEASE FOR IMMEDIATE RELEASE For Further Information Contact: Charles D. Knight Executive Vice President Chief Financial Officer InvestorRelations@catocorp.com CATO REPORTS 1Q EARNINGS CHARLOTTE, N.C. (May 23, 2024) – The Cato Corporation (NYSE: CATO) today reported net income of $11.0 million or $0.54 per diluted share for the first quarter ended May 4, 2024, compared to net income of $4.4 million or $0.22 per diluted share for the first quarter ended April 29, 2023. Sales for the first ...