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The Cato Corporation (CATO) investor relations material

The Cato Corporation Q2 2026 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q2 2026 earnings summary26 Aug, 2025

Executive summary

  • Q2 2025 sales rose 5% year-over-year to $174.7 million, driven by a 9% same-store sales increase, partially offset by store closures.

  • Net income for Q2 2025 was $6.8 million ($0.35 per diluted share), up from $0.1 million ($0.01 per share) in Q2 2024.

  • For the six months ended August 2, 2025, sales were $343.1 million, up 0.3% year-over-year, with a 4% same-store sales rise, offset by store closures.

  • Six-month net income was $10.1 million ($0.51 per share), down from $11.1 million ($0.54 per share) in the prior year.

  • The company operated 1,101 stores at quarter-end, down from 1,166 a year ago, with 16 permanent closures in the first half and plans to close about 50 stores in fiscal 2025.

Financial highlights

  • Gross margin for Q2 2025 improved to 36.2% from 34.6% year-over-year due to lower buying and distribution costs.

  • SG&A expenses as a percent of sales decreased to 32.8% from 34.9% in Q2 2024, mainly from lower payroll and insurance costs.

  • Cost of goods sold as a percent of retail sales decreased to 63.8% in Q2 2025 from 65.4% in Q2 2024.

  • Q2 2025 net income margin was 3.9%, up from 0.1% in Q2 2024.

  • Year-to-date gross margin rose to 35.6% from 35.2%; SG&A expenses as a percent of sales fell to 32.8% from 33.6%.

Outlook and guidance

  • Tariff increases on products from China and Southeast Asia are expected to raise product acquisition costs in the second half of the year.

  • The company anticipates continued pricing and margin pressures as tariffs impact retail pricing and consumer discretionary spending.

  • Management will focus on expense control amid ongoing market uncertainties.

  • Capital expenditures for fiscal 2025 are expected to be approximately $5.9 million.

  • The company expects to close about 50 stores in fiscal 2025.

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Frequently asked questions

The Cato Corporation is a specialty retailer of women's fashion apparel and accessories, operating in the retail sector. Founded in 1946, the company has established a significant presence in the southeastern United States, managing approximately 1,300 apparel and accessories specialty stores across over 30 states. These stores operate under the brand names "Cato", "Versona", "It's Fashion", and "It's Fashion Metro", offering a wide range of products including dresses, sweaters, casual sportswear, coats, shoes, lingerie, costume jewelry, and handbags. The company is headquartered in Charlotte, North Carolina, and its shares are listed on the NYSE.

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