UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street NW
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Form
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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☐
2
THE CATO CORPORATION
Item 2.02. Results of Operations and Financial Condition
On August 22, 2024, The Cato Corporation issued a press release regarding its financial results for the second
quarter ending August 3, 2024. A copy of this press release is hereby incorporated as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit 104 – Cover Page Interactive Data File (embedded within Inline XBRL document)
3
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
August 27, 2024
/s/ John P. D. Cato
Date
John P. D. Cato
Chairman, President and
Chief Executive Officer
August 27, 2024
/s/ Charles D. Knight
Date
Charles D. Knight
Executive Vice President
Chief Financial Officer
4
Exhibit Index
Exhibit
Exhibit
No.
99.1
104 Cover page Interactive Data File (embedded within Inline
XBRL document)
104
EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
For Further Information Contact:
CATO REPORTS 2Q RESULTS
CHARLOTTE, N.C. (August 22, 2024) – The Cato Corporation (NYSE: CATO) today reported net income of $0.1
million or $0.01 per diluted share for the second quarter ended August 3, 2024, compared to net income of $1.1 million or
$0.06 per diluted share for the second quarter ended July 29, 2023.
Sales for the second quarter ended August 3, 2024 were $166.9 million, a decrease of 8% from sales of $181.2 million for
the second quarter ended July 29, 2023 primarily due to closed stores in 2023 and a 2% same-store sales decrease for the
quarter compared to 2023.
For the six months ended August 3, 2024, the Company reported net income of $11.1 million or $0.54 per diluted share,
compared to net income of $5.6 million or $0.27 per diluted share for the six months ended July 29, 2023. Sales for the
six months ended August 3, 2024 were $342.2 million, a decrease of 8% from sales of $371.5 million for the six months
ended July 29, 2023 primarily due to closed stores in 2023 and a 4% same-store sales decrease compared to 2023.
pressure on our customers’ discretionary spending,” stated John Cato, Chairman, President, and Chief Executive Officer.
“We continue to manage our SG&A expenses tightly in line with our current sales trend. We believe the back half of the
year will remain challenging.”
Gross margin decreased from 35.1% to 34.6% of sales in the quarter due to higher distribution costs and deleveraging of
occupancy and buying costs, partially offset by higher merchandise margins. SG&A expenses as a percent of sales
increased from 34.0% to 34.9% of sales during the quarter primarily due to deleveraging of payroll costs partially offset
by lower closed store and advertising expenses. However, SG&A expenses in the quarter were $3.4 million lower than
last year due to lower payroll and insurance costs, equity compensation and advertising expenses. Tax expense for the
quarter was $0.6 million versus $1.3 million in the prior year. The decrease in tax expense is primarily due to lower
taxable income, valuation allowances against net deferred tax assets and the impact of the foreign rate differential and
lower state income taxes.
Year -to-date gross margin decreased from 35.5% of sales to 35.2% primarily due to higher distribution costs and
deleveraging of occupancy and buying costs, partially offset by higher merchandise margins. Year-to-date SG&A
expenses were 33.6% as a percent of sales versus 33.3% in the prior year primarily due to deleveraging of payroll costs
and higher insurance costs, partially offset by lower closed store and advertising expenses. SG&A expenses year-to-date
were $8.6 million lower than last year due to lower payroll costs and equity compensation, and closed store and
advertising expenses, partially offset by higher insurance expense. Income tax expense for the first half decreased to $1.3
million from $3.5 million last year, primarily due to valuation allowances against net deferred tax assets and the impact of
the foreign rate differential and lower state income taxes.
During the second quarter ended August 3, 2024, the Company closed five stores. As of August 3, 2024, the Company
had 1,166 stores in 31 states, compared to 1,247 stores in 31 states as of July 29, 2023.
concepts, “Cato,” “Versona” and “It’s Fashion.” The Company’s Cato stores offer exclusive merchandise with fashion
and quality comparable to mall specialty stores at low prices every day. The Company also offers exclusive merchandise
found in its Cato stores at www.catofashions.com. Versona is a unique fashion destination offering apparel and
accessories including jewelry, handbags and shoes at exceptional prices every day. Select Versona merchandise can also
be found at www.shopversona.com. It’s Fashion offers fashion with a focus on the latest trendy styles for the entire
family at low prices every day.
Statements in this press release that express a belief, expectation or intention, as well as those that are not a historical
fact,
results, activities or opportunities, and potential impacts and effects of the coronavirus are considered “forward-looking”
within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based
on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause
actual results to differ materially from those contemplated by the forward-looking statements. Such factors include, but
are not limited to, any actual or perceived deterioration in the conditions that drive consumer confidence and spending,
including, but not limited to, prevailing social, economic, political and public health conditions and uncertainties, levels
of unemployment, fuel, energy and food costs, wage rates, tax rates, interest rates, home values, consumer net worth and
the availability of credit; changes in laws or regulations affecting our business including but not limited to tariffs;
uncertainties regarding the impact of any governmental action regarding, or responses to, the foregoing conditions;
competitive factors and pricing pressures; our ability to predict and respond to rapidly changing fashion trends and
consumer demands; our ability to successfully implement our new store development strategy to increase new store
openings and the ability of any such new stores to grow and perform as expected; adverse weather, public health threats
(including the global coronavirus (COVID-19) outbreak) or similar conditions that may affect our sales or operations;
inventory risks due to shifts in market demand, including the ability to liquidate excess inventory at anticipated margins;
and other factors discussed under “Risk Factors” in Part I, Item 1A of the Company’s most recently filed annual report
on Form 10-K and in other reports the Company files with or furnishes to the SEC from time to time. The Company does
not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it
clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any
changes made to this press release by wire or Internet services
* * *
THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED August 3, 2024 AND July 29, 2023
(Dollars in thousands, except per share data)
Quarter Ended
Six Months Ended
August 3,
%
July 29,
%
August 3,
%
July 29,
%
2024
Sales
2023
Sales
2024
Sales
2023
Sales
REVENUES
$
166,934
100.0%
$
181,181
100.0%
$
342,206
100.0%
$
371,492
100.0%
1,694
1.0%
1,690
0.9%
3,521
1.0%
3,429
0.9%
168,628
101.0%
182,871
100.9%
345,727
101.0%
374,921
100.9%
GROSS MARGIN (Memo)
57,812
34.6%
63,564
35.1%
120,579
35.2%
131,788
35.5%
COSTS AND EXPENSES, NET
109,122
65.4%
117,617
64.9%
221,627
64.8%
239,704
64.5%
58,181
34.9%
61,618
34.0%
114,933
33.6%
123,552
33.3%
2,329
1.4%
2,510
1.4%
4,369
1.3%
4,867
1.3%
(1,742)
-1.0%
(1,334)
-0.7%
(7,563)
-2.2%
(2,231)
-0.6%
167,890
100.6%
180,411
99.6%
333,366
97.4%
365,892
98.5%
Income Before Income Taxes
738
0.4%
2,460
1.4%
12,361
3.6%
9,029
2.4%
Income Tax Expense
643
0.4%
1,333
0.7%
1,292
0.4%
3,475
0.9%
Net Income (Loss)
$
95
0.1%
$
1,127
0.6%
$
11,069
3.2%
$
5,554
1.5%
Basic Earnings Per Share
$
0.01
$
0.06
$
0.54
$
0.27
Diluted Earnings Per Share
$
0.01
$
0.06
$
0.54
$
0.27
THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
August 3,
February 3,
2024
2024
(Unaudited)
(Unaudited)
ASSETS
Current Assets
$
30,764
$
23,940
73,902
79,012
3,562
3,973
29,772
29,751
95,972
98,603
9,506
7,783
Total Current Assets
243,478
243,062
Property and Equipment - net
63,975
64,022
Other Assets
22,340
25,047
Right-of-Use Assets, net
125,779
154,686
$
455,572
$
486,817
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
$
122,498
$
126,900
Current Lease Liability
51,091
61,108
Noncurrent Liabilities
14,573
14,475
Lease Liability
72,348
92,013
Stockholders' Equity
195,062
192,321
$
455,572
$
486,817