FALSE 0000018255 0000018255 2024-11-21 2024-11-21
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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):
 
November 21, 2024
 
THE CATO CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware
1-31340
56-0484485
(State or Other Jurisdiction
of
 
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.
☐
 
 
 
 
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.
 
THE CATO
 
CORPORATION
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.
 
2024
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:
 
Charles D. Knight
 
Executive Vice President
 
Chief Financial Officer
 
InvestorRelations@catocorp.com
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,
 
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 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
 
Retail sales
$
144,642
100.0%
$
156,682
100.0%
$
486,848
100.0%
$
528,174
100.0%
 
Other revenue (principally finance,
 
late fees and layaway charges)
1,528
1.1%
1,574
1.0%
5,049
1.0%
5,003
0.9%
 
Total revenues
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
 
Cost of goods sold
102,955
71.2%
105,832
67.5%
324,582
66.7%
345,536
65.4%
 
Selling, general and administrative
57,876
40.0%
61,792
39.4%
172,809
35.5%
185,344
35.1%
 
Depreciation
2,737
1.9%
2,504
1.6%
7,106
1.5%
7,371
1.4%
 
Interest and other income
(2,646)
-1.8%
(1,523)
-1.0%
(10,209)
-2.1%
(3,754)
-0.7%
 
Costs and expenses, net
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
 
Cash and cash equivalents
$
20,216
$
23,940
 
Short-term investments
65,994
79,012
 
Restricted cash
3,355
3,973
 
Accounts receivable - net
24,776
29,751
 
Merchandise inventories
107,159
98,603
 
Other current assets
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
 
TOTAL
$
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
 
TOTAL
$
424,405
$
486,817
 
 
 
EXHIBIT 99.2
NEWS RELEASE
FOR IMMEDIATE RELEASE
 
For Further Information Contact:
 
Charles D. Knight
 
Executive Vice President
 
Chief Financial Officer
 
InvestorRelations@catocorp.com
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,
 
i
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.
* * *
v3.24.3
Document and Entity Information
Nov. 21, 2024
Document and Entity Information [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Nov. 21, 2024
Entity Registrant Name THE CATO CORPORATION
Entity Central Index Key 0000018255
Entity Emerging Growth Company false
Security 12b Title Class A - Common Stock, par value $.033 per share
Trading Symbol CATO
Security Exchange Name NYSE
Entity File Number 1-31340
Entity Incorporation State Country Code DE
Entity TaxIdentification Number 56-0484485
Entity Address Address Line 1 8100 Denmark Road
Entity Address City Or Town Charlotte
Entity Address State Or Province NC
Entity Address Postal Zip Code 28273-5975
City Area Code (704)
Local Phone Number 554-8510
Written Communications false
Soliciting Material false
Pre-Commencement Tender Offer false
Pre-Commencement Issuer Tender Offer false
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