CATO REPORTS 3Q RESULTS

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]