Cato(CATO) - 2026 Q1 - Quarterly Report

Financial Performance - Total retail sales for Q1 2025 were $168.4 million, a decrease from $175.3 million in Q1 2024, primarily due to store closures[66] - Total revenues for Q1 2025 were $170.2 million, down from $177.1 million in Q1 2024[67] - Net income for Q1 2025 was $3.4 million, or 2.0% of total revenues, down from $11.0 million, or 6.3% in Q1 2024[60] - Same-store sales were flat for the quarter, with e-commerce sales accounting for less than 5.0% of total sales[66] Cost and Expenses - Cost of goods sold was $109.3 million, or 64.9% of retail sales, compared to $112.5 million, or 64.2% in Q1 2024[69] - SG&A expenses were $55.3 million, or 32.8% of retail sales, compared to $56.8 million, or 32.4% in Q1 2024[70] Tax and Store Closures - The effective income tax rate for Q1 2025 was 21.9%, compared to 5.6% in Q1 2024[74] - The company expects to close approximately 50 stores in fiscal 2025[67] Cash Flow and Investments - Net cash provided by investing activities totaled $7.9 million in Q1 fiscal 2025, down from $14.6 million in Q1 fiscal 2024, primarily due to decreased sales of short-term investments[81] - Net cash used in financing activities was $0.9 million in Q1 fiscal 2025, a decrease from $5.6 million in Q1 fiscal 2024, attributed to no dividends paid and reduced stock repurchases[82] - Capital expenditures for the first three months of fiscal 2025 totaled $1.0 million, down from $3.3 million in the same period last year[80] Share Repurchase and Credit Facility - As of May 3, 2025, the company had 703,419 shares remaining in open authorizations under its share repurchase program[83] - The company has established an asset-based revolving credit facility of up to $35.0 million, with $30.0 million available as of May 3, 2025[78][79] Investment Portfolio - The company's investment portfolio is primarily in corporate bonds and taxable governmental debt securities with ratings of A or better, with maturities ranging from 10 days to 2.9 years[85] - Deferred compensation plan assets were $9.2 million as of May 3, 2025, slightly down from $9.3 million on February 1, 2025[86] Market Risk - The company is subject to market rate risk from interest rate changes related to financing, investing, and cash management activities, but does not consider this exposure to be material[88]