CATO 8-K
Cato Corp (CATO)
8-K
2024-11-25
For: 2024-11-21
View Original
Added on
April 11, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street NW
Washington, D.C. 29549
Form
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction
of Incorporation
(Commission
File Number)
(IRS Employer
Identification No.)
,
,
(Address of Principal Executive Offices)
(Zip Code)
(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:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
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.
☐
2
THE CATO CORPORATION
Item 2.02. Results of Operations and Financial Condition
On November 21, 2024 The Cato Corporation issued a press release regarding its financial results for the third
quarter ending November 2, 2024. A copy of this press release is hereby incorporated as Exhibit 99.1 hereto.
Item 7.01. Regulation FD Disclosure.
On November 21, 2024, The Cato Corporation issued a press release announcing the decision to suspend its
quarterly dividend.
A copy of the press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by
reference herein.
The information contained in this Item 7.01 and in Exhibit 99.2 shall not be deemed “filed” for purposes of Section
18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by
specific reference in such a filing.
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.
November 25, 2024
/s/ John P. D. Cato
Date
John P. D. Cato
Chairman, President and
Chief Executive Officer
November 25, 2024
/s/ Charles D. Knight
Date
Charles D. Knight
Executive Vice President
Chief Financial Officer
4
Exhibit Index
Exhibit
Exhibit
No.
99.1
99.2
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 3Q RESULTS
CHARLOTTE, N.C. (November 21, 2024) – The Cato Corporation (NYSE: CATO) today reported a net loss of $15.1
million or ($0.79) per diluted share for the third quarter ended November 2, 2024, compared to a net loss of $6.1 million
or ($0.30) per diluted share for the third quarter ended October 28, 2023.
Sales for the third quarter ended November 2, 2024 were $144.6 million, a decrease of 8% from sales of $156.7 million
for the third quarter ended October 28, 2023. The Company’s same-store sales for the quarter decreased 3% compared to
2023.
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 net loss of $0.5 million or ($0.02) per diluted share for the nine months ended October 28, 2023. Sales
for the nine months ended November 2, 2024 were $486.8 million, a decrease of 8% to sales of $528.2 million for the
nine months ended October 28, 2023. Year-to-date same-store sales decreased 4% compared to 2023.
“Our third quarter sales trend deteriorated from second quarter, in part due to three major hurricanes over a five week
span, supply chain issues causing late merchandise receipts to the stores and continued negative pressure on our
customers’ disposable income,” stated John Cato, Chairman, President, and Chief Executive Officer. “We are managing
both SG&A expenses and inventory levels in line with our current sales trend. However, we continue to incur higher
costs to move inventory to our stores due to the bankruptcy of a carrier that previously serviced 50% of our stores, as well
as, higher distribution costs associated with conversion issues for a distribution center systems and automation upgrade.
We believe that the fourth quarter will remain challenging.”
Gross margin decreased from 32.5% to 28.8% of sales in the quarter due to higher markdowns, as well as, increased
freight, distribution and occupancy costs as a percent of sales. SG&A expenses as a percent of sales increased from
39.4% to 40.0% of sales during the quarter primarily due to deleveraging of payroll costs, partially offset by lower
advertising and insurance expenses. SG&A expenses were $3.9 million lower than last year due to lower payroll,
advertising and insurance costs. Tax expense for the quarter was $0.3 million versus a tax benefit of $4.3 million in the
prior year, primarily due to valuation allowances against net deferred tax assets.
Year -to-date gross margin decreased to 33.3% of sales from 34.6% in the prior year primarily due to increased occupancy,
freight and distribution costs as a percent of sales, partially offset by increased merchandise margins. The year-to-date
SG&A rate was 35.5% versus 35.1% primarily due to deleveraging of payroll costs and insurance costs, partially offset by
lower advertising costs. SG&A expenses were $12.5 million lower than last year due to lower payroll, insurance and
advertising costs. Tax expense for the nine-month period was $1.6 million compared to $0.8 million tax benefit last year,
primarily due to valuation allowances against net deferred tax assets.
During the third quarter ended November 2, 2024, the Company opened one store. Year -to-date, the Company opened
one store and closed 13 stores. As of November 2, 2024, the Company has 1,167 stores in 31 states, compared to 1,245
stores in 31 states as of October 28, 2023.
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.
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 November 2, 2024 AND October 28, 2023
(Dollars in thousands, except per share data)
Quarter Ended
Six Months Ended
November 2,
%
October 28,
%
November 2,
%
October 28,
%
2024
Sales
2023
Sales
2024
Sales
2023
Sales
REVENUES
$
144,642
100.0%
$
156,682
100.0%
$
486,848
100.0%
$
528,174
100.0%
1,528
1.1%
1,574
1.0%
5,049
1.0%
5,003
0.9%
146,170
101.1%
158,256
101.0%
491,897
101.0%
533,177
100.9%
GROSS MARGIN (Memo)
41,687
28.8%
50,850
32.5%
162,266
33.3%
182,638
34.6%
COSTS AND EXPENSES, NET
102,955
71.2%
105,832
67.5%
324,582
66.7%
345,536
65.4%
57,876
40.0%
61,792
39.4%
172,809
35.5%
185,344
35.1%
2,737
1.9%
2,504
1.6%
7,106
1.5%
7,371
1.4%
(2,646)
-1.8%
(1,523)
-1.0%
(10,209)
-2.1%
(3,754)
-0.7%
160,922
111.3%
168,605
107.6%
494,288
101.5%
534,497
101.2%
Income Before Income Taxes
(14,752)
-10.2%
(10,349)
-6.6%
(2,391)
-0.5%
(1,320)
-0.3%
Income Tax Expense
322
0.2%
(4,272)
-2.7%
1,614
0.3%
(797)
-0.2%
Net Income (Loss)
$
(15,074)
-10.4%
$
(6,077)
-3.9%
$
(4,005)
-0.8%
$
(523)
-0.1%
Basic Earnings Per Share
$
(0.79)
$
(0.30)
$
(0.24)
$
(0.02)
Diluted Earnings Per Share
$
(0.79)
$
(0.30)
$
(0.24)
$
(0.02)
THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
November 2,
February 3,
2024
2024
(Unaudited)
(Unaudited)
ASSETS
Current Assets
$
20,216
$
23,940
65,994
79,012
3,355
3,973
24,776
29,751
107,159
98,603
8,705
7,783
Total Current Assets
230,205
243,062
Property and Equipment - net
62,648
64,022
Other Assets
19,783
25,047
Right-of-Use Assets, net
111,769
154,686
$
424,405
$
486,817
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
$
123,697
$
126,900
Current Lease Liability
45,836
61,108
Noncurrent Liabilities
14,555
14,475
Lease Liability
63,218
92,013
Stockholders' Equity
177,099
192,321
$
424,405
$
486,817
EXHIBIT 99.2
NEWS RELEASE
FOR IMMEDIATE RELEASE
For Further Information Contact:
THE CATO CORPORATION SUSPENDS REGULAR QUARTERLY DIVIDEND
CHARLOTTE, N.C. (November 21, 2024) – In light of the current economic conditions and current sales trends
the Board of Directors of The Cato Corporation (NYSE: CATO) suspended the regular quarterly dividend.
Statements in this press release that express a belief, expectation or intention, as well as those that are not a historical fact,
ncluding,
without limitation, statements regarding the Company’s expected or estimated operational financial results, activities or
opportunities, and potential impacts and effects of interest rates, inflation or other factors that may affect our customers’
discretionary spending or our costs 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, or continuation of negative trends 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, inflation, wage rates, tax rates,
interest rates, home values, consumer net worth and the availability of credit; changes in laws, regulations or government policies
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; underperformance or other factors that
may lead to, or affect the volume of, store closures; adverse weather, public health threats (including the global coronavirus (COVID-
19) outbreak), acts of war or aggression or similar conditions that may affect our merchandise supply chain, sales or operations;
inventory risks due to shifts in market demand, including the ability to liquidate excess inventory at anticipated margins; adverse
developments or volatility affecting the financial services industry or broader financial markets; 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.
* * *