8-K - CATO - Equibles

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) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

August 17, 2023

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

the

Form

8-K

filing

intended

simultaneously

satisfy

the

filing

obligation

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 August 17, 2023, The Cato Corporation issued a press release regarding its

financial results for the second

quarter ending July 29, 2023. A copy of this press release is hereby incorporated

as Exhibit 99.1 hereto.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 - Press Release issued August 17, 2023

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

August 21, 2023

/s/ John P.

D. Cato

Date

John P.

D. Cato

Chairman, President and

Chief Executive Officer

August 21, 2023

/s/ Charles D. Knight

Date

Charles D. Knight

Executive Vice President

Chief Financial Officer

Exhibit Index

Exhibit

No.

99.1 - Press Release issued August 17, 2023

99.1

104

Cover page Interactive Data File (embedded within Inline

XBRL document)

104

exhibit99

EXHIBIT 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

For Further Information Contact:

Charles D. Knight

Executive Vice President

Chief Financial Officer

InvestorRelations@catocorp.com

CATO REPORTS

2Q RESULTS

CHARLOTTE, N.C. (August 17, 2023) – The Cato Corporation (NYSE: CATO) today reported net income of $1.1

million or $0.06 per diluted share for the second quarter ended July 29, 2023,

compared to a net loss of $2.3 million or

($0.11) per diluted share for the second quarter ended July 30, 2022.

Sales for the second quarter ended July 29, 2023 were $181.2 million,

or a decrease of 7% from sales of $195.0 million

for the second quarter

ended July 30, 2022.

The Company’s same-store sales for the quarter decreased 5% compared to

2022.

For the six months ended July 29, 2023, the Company reported net

income of $5.6 million or $0.27 per diluted share,

compared to net income of $7.4 million or $0.35 per diluted share for the six

months ended July 30, 2022.

Sales for the

six months ended July 29, 2023 were $371.5 million, a decrease of 7%

from sales of $399.9 million for the six months

ended July 30, 2022.

Year-to-date same-store sales decreased 5% compared to 2022.

“Our year-to-date sales trend continues to be negatively impacted by pressure on our customers’

discretionary spending,”

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

“Our gross margin improved as we took steps to

right size our inventory.

However, we believe the back half of the year will remain challenging.”

Gross margin increased to 35.1% from 32.4% of sales in the quarter due to higher

merchandise margins and decreased

freight expense.

SG&A expenses as a percent of sales increased from

31.2% to 34.0% of sales during the quarter

primarily due to increased payroll and insurance expense. Tax expense for the quarter was $1.3 million versus $5.7

million in the prior year, reflecting a more normalized tax rate in the quarter compared to last year.

Year

-to-date gross margin increased to 35.5% of sales from 34.0% the prior year primarily

due to increased merchandise

margins and decreased freight expense.

Year-to-date SG&A expenses were 33.3% as a percent of sales versus 30.3% in

the prior year primarily due to increased payroll and insurance expense.

Income tax expense for the first half decreased to

$3.5 million versus $7.6 million last year.

During the second quarter ended July 29, 2023, the Company

opened two new stores, relocated one store and closed 19

stores.

As of July 29, 2023, the Company has 1,247 stores in 31 states,

compared to 1,312 stores in 32 states as of July

30, 2022.

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,

including, without limitation, statements regarding the Company’s

expected or estimated operational financial

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 July 29, 2023 AND July 30, 2022

(Dollars in thousands, except per share data)

Quarter Ended

Six Months Ended

July 29,

July 30,

July 29,

July 30,

2023

Sales

2022

Sales

2023

Sales

2022

Sales

REVENUES

Retail sales

181,181

100.0%

195,006

100.0%

371,492

100.0%

399,939

100.0%

Other revenue (principally finance,

late fees and layaway charges)

1,690

0.9%

1,858

1.0%

3,429

0.9%

3,646

0.9%

Total revenues

182,871

100.9%

196,864

101.0%

374,921

100.9%

403,585

100.9%

GROSS MARGIN (Memo)

63,564

35.1%

63,257

32.4%

131,788

35.5%

135,947

34.0%

COSTS AND EXPENSES, NET

Cost of goods sold

117,617

64.9%

131,749

67.6%

239,704

64.5%

263,992

66.0%

Selling, general and administrative

61,618

34.0%

60,768

31.2%

123,552

33.3%

121,209

30.3%

Depreciation

2,510

1.4%

2,811

1.4%

4,867

1.3%

5,554

1.4%

Interest and other income

(1,334)

-0.7%

(1,884)

-1.0%

(2,231)

-0.6%

(2,287)

-0.6%

Costs and expenses, net

180,411

99.6%

193,444

99.2%

365,892

98.5%

388,468

97.1%

Income Before Income Taxes

2,460

1.4%

3,420

1.8%

9,029

2.4%

15,117

3.8%

Income Tax Expense

1,333

0.7%

5,694

2.9%

3,475

0.9%

7,643

1.9%

Net Income (Loss)

1,127

0.6%

(2,274)

-1.2%

5,554

1.5%

7,474

1.9%

Basic Earnings Per Share

0.06

(0.11)

0.27

0.35

Basic Weighted Average Shares

20,593,949

21,177,321

20,474,142

21,261,405

Diluted Earnings Per Share

0.06

(0.11)

0.27

0.35

THE CATO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

July 29,

January 28,

2023

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

55,977

20,005

Short-term investments

77,222

108,652

Restricted cash

3,877

3,787

Accounts receivable - net

26,915

26,497

Merchandise inventories

92,718

112,056

Other current assets

7,098

6,676

Total Current Assets

263,807

277,673

Property and Equipment - net

73,871

70,382

Noncurrent Deferred Income Taxes

9,888

9,213

Other Assets

21,770

21,596

Right-of-Use Assets, net

138,331

174,276

TOTAL

507,667

553,140

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

127,971

135,597

Current Lease Liability

32,431

67,360

Noncurrent Liabilities

16,342

16,183

Lease Liability

105,390

107,407

Stockholders' Equity

225,533

226,593

TOTAL

507,667

553,140