The Cato (CATO) Q1 2027 earnings summary

Executive summary

• Net income for Q1 2026 was $9.3 million ($0.47 per diluted share), up from $3.3 million ($0.17 per diluted share) in Q1 2025.

• Sales increased 0.7% year-over-year to $169.5 million, with same-store sales up 3%.

• Results benefited from a $5.7 million IEEPA tariff refund claim, partially offset by higher sales of marked-down goods.

• Opened two stores and closed six, operating 1,065 stores as of May 2, 2026, down from 1,109 a year earlier.

Financial highlights

• Gross margin rose to 37.2% from 35.1% year-over-year, aided by the tariff refund.

• Selling, general and administrative expense decreased to $53.9 million from $55.3 million, and as a percentage of sales fell to 31.8% from 32.8%.

• Income before income taxes was $9.8 million (5.8% of sales), up from $4.2 million (2.5%).

• Income tax expense decreased to $0.5 million from $0.9 million, mainly due to lower foreign taxes.

• Basic and diluted EPS were $0.47, up from $0.17 year-over-year.

Outlook and guidance

• Sales are expected to be negatively impacted by rising inflation, especially fuel and food prices, reducing customers' discretionary income.