UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

450 Fifth Street NW

Washington, D.C. 29549

Form

8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

November 19, 2020

THE CATO CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware

1-31340

56-0484485

(State or Other Jurisdiction

Incorporation

(Commission

File Number)

(IRS Employer

Identification No.)

8100 Denmark Road

Charlotte

North Carolina

(Address of Principal Executive Offices)

28273-5975

(Zip Code)

(704)

554-8510

(Registrant’s Telephone

Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the

appropriate box

below if

the Form

8-K filing

is intended

to simultaneously

satisfy the

filing obligation

of the

registrant

under any of the following provisions:

☐

Written communications pursuant to

Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange

Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d

-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e

-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A - Common Stock, par value $.033 per share

CATO

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging

growth company as defined in as defined in Rule 405

of the Securities

Act of 1933 (§230.405 of this chapter) or Rule 12b

-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

☐

If an emerging growth company,

indicate by check mark if the registrant has elected not to

use the extended transition period for

complying with any new or revised financial accounting standards

provided pursuant to Section 13(a) of the Exchange Act.

☐

THE CATO

CORPORATION

Item 2.02.

Results of Operations and Financial Condition.

On November 19, 2020, The Cato Corporation issued a press release regarding its financial

results for the third quarter ending October 31, 2020.

A copy of this press release is furnished as

Exhibit 99.1 hereto.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits

Exhibit 99.1 - Press Release issued November 19, 2020

Exhibit 104 – Cover Page Interactive Data File (embedded within Inline XBRL

document)

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.

THE CATO

CORPORATION

November 20, 2020

/s/ John P.

D. Cato

Date

John P.

D. Cato

Chairman, President and

Chief Executive Officer

November 20, 2020

/s/ John R. Howe

Date

John R. Howe

Executive Vice President

Chief Financial Officer

Exhibit Index

Exhibit

No.

Exhibit 99.1 - Press Release issued November

19, 2020

99.1

Exhibit 104 – Cover Page Interactive Data File

(embedded within Inline XBRL document)

104

exhibit991

8100 Denmark Road

P.O.

Box 34216

Charlotte, NC

28234

(704) 554-8510

EXHIBIT 99.1

The CATO Corporation

NEWS RELEASE

FOR IMMEDIATE RELEASE

For Further Information Contact:

John R. Howe

Executive Vice President

Chief Financial Officer

704-551-7315

CATO

REPORTS 3Q NET LOSS

CHARLOTTE, N.C. (November 19, 2020) –– The Cato Corporation (NYSE: CATO)

today reported a

net loss of $3.6 million or ($0.15) per diluted share for the third quarter ended October 31, 2020,

compared to net income of $6.0 million or $0.24

per diluted share for the third quarter ended

November 2, 2019.

Sales for the third quarter were $149.2 million, or a decrease of 21% from sales

of $189.4 million for the third quarter ended November 2, 2019.

The Company’s same-store sales

for the quarter decreased 23% to the same period last year.

As previously announced, Cato closed all stores due to the COVID-19 pandemic beginning March 19,

2020.

On May 1, 2020, the Company began reopening stores in a phased approach, with limited

operating hours, consistent with local health and safety guidelines and regulations.

As of June 15,

2020, all stores had reopened.

For the nine months ended October 31, 2020, the Company reported a net loss of $39.2 million or

($1.64) per diluted share, compared to net income of $39.1 million or $1.59 per diluted share for the

nine months ended November 2, 2019.

Sales for the nine months ended October 31, 2020 were

$414.3 million, down 34% to sales of $627.8 million for the nine months ended November 2, 2019.

Year

-to-date same-store sales decreased 35%.

“Sales in the third quarter reflected continued softening of customer demand as COVID-19 cases

continued to rise throughout our market areas and many people still have not returned to work.

we see this trend continuing, we anticipate that the remainder of the year will be challenging,” stated

John Cato, Chairman, President, and Chief Executive Officer.

“We appreciate our store associates’

diligence in providing a safe shopping environment and our customers' patience as we continue our

8100 Denmark Road

P.O.

Box 34216

Charlotte, NC

28234

(704) 554-8510

enhanced cleaning and product handling procedures to make our stores as safe as possible in light of

the COVID-19 pandemic.”

For the quarter, gross margin decreased to 26.7% from 37.4% of sales the prior year due to a

reduction in merchandise contribution, combined with the effects of deleveraging from the sales

decline.

SG&A expenses as a percent of sales increased to 34.8% from 34.2% during the quarter

primarily due to the effects of deleveraging, and an impairment charge of $2.3 million, partially offset

by company-wide expense reductions and reduction of incentive compensation compared to prior

year.

A pre-tax loss and the beneficial effects of the CARES Act resulted in $9.7 million of tax benefit

versus $0.1 million of expense in the prior year.

The Company ended the quarter with unrestricted

cash and short-term investments of $151.4 million and full availability of its $35 million revolving line

of credit.

Year

-to-date gross margin decreased to 21.4% of sales from 38.7% the prior year primarily due to a

reduction in merchandise contribution combined with the effects of deleveraging resulting from the

sales decline.

The year-to-date SG&A rate was 35.8% versus 31.2% last year primarily due to the

effects of deleveraging and impairment charges of $7.6 million, partially offset by company-wide

expense reductions and the reduction of incentive compensation.

Income tax benefit for the nine

months was $22.7 million compared to an expense of $6.5 million last year.

During the third quarter ended October 31, 2020, the Company opened 16 new stores, which had

leases prior to the COVID-19 pandemic and permanently closed 2 stores.

As of October 31, 2020,

the Company operated 1,347 stores in 33 states, compared to 1,298 stores in 31 states as of August

3, 2019.

The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories

operating three 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.

8100 Denmark Road

P.O.

Box 34216

Charlotte, NC

28234

(704) 554-8510

Statements in this press release not historical in nature

ncluding, without limitation, statements regarding the Company’s

expected or estimated operational and financial results

and potential impact 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 tariffs; uncertainties

regarding the impact of any governmental 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 open new stores as planned and our 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.

#

8100 Denmark Road

P.O.

Box 34216

Charlotte, NC

28234

(704) 554-8510

THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE PERIODS ENDED OCTOBER 31, 2020 AND NOVEMBER 2, 2019

(Dollars in thousands, except per share data)

Quarter Ended

Nine Months Ended

October 31,

November 2,

October 31,

November 2,

2020

Sales

2019

Sales

2020

Sales

2019

Sales

REVENUES

Retail sales

149,205

100.0%

189,357

100.0%

414,283

100.0%

627,780

100.0%

Other revenue (principally finance,

late fees and layaway charges)

1,586

1.1%

2,166

1.1%

5,410

1.3%

6,676

1.1%

Total revenues

150,791

101.1%

191,523

101.1%

419,693

101.3%

634,456

101.1%

GROSS MARGIN (Memo)

39,801

26.7%

70,733

37.4%

88,545

21.4%

242,701

38.7%

COSTS AND EXPENSES, NET

Cost of goods sold

109,404

73.3%

118,624

62.7%

325,738

78.6%

385,079

61.3%

Selling, general and administrative

51,885

34.8%

64,681

34.2%

148,353

35.8%

196,737

31.2%

Depreciation

3,619

2.4%

3,844

2.0%

11,113

2.7%

11,523

1.8%

Interest and other income

(791)

-0.5%

(1,662)

-0.9%

(3,603)

-0.9%

(4,491)

-0.7%

Cost and expenses, net

164,117

110.0%

185,487

98.0%

481,601

116.2%

588,848

93.8%

Income (Loss) Before Income Taxes

(13,326)

-8.9%

6,036

3.2%

(61,908)

-14.9%

45,608

7.3%

Income Tax (Benefit)/Expense

(9,704)

-6.5%

0.0%

(22,698)

-5.5%

6,501

1.0%

Net Income (Loss)

(3,622)

-2.4%

5,985

3.2%

(39,210)

-9.5%

39,107

6.2%

Basic Earnings Per Share

(0.15)

0.24

(1.64)

1.59

Diluted Earnings Per Share

(0.15)

0.24

(1.64)

1.59

8100 Denmark Road

P.O.

Box 34216

Charlotte, NC

28234

(704) 554-8510

THE CATO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

October 31,

February 1,

2020

(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents

18,812

11,824

Short-term investments

132,574

200,387

Restricted cash

3,917

3,896

Accounts receivable - net

47,725

26,088

Merchandise inventories

84,281

115,365

Other current assets

7,185

5,237

Total Current Assets

294,494

362,797

Property and Equipment – net

81,853

88,667

Noncurrent Deferred Income Taxes

7,464

8,636

Other Assets

22,722

24,073

Right-of-Use Assets, net

184,338

200,803

TOTAL

590,871

684,976

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

122,489

136,153

Current Lease Liability

54,250

63,149

Noncurrent Liabilities

19,799

21,976

Lease Liability

138,196

147,184

Stockholders' Equity

256,137

316,514

TOTAL

590,871

684,976