Form 8-K - Current report

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 16, 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 November 16, 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

November 20, 2023

/s/ John P.

D. Cato

Date

John P.

D. Cato

Chairman, President and

Chief Executive Officer

November 20, 2023

/s/ Charles D. Knight

Date

Charles D. Knight

Executive Vice President

Chief Financial Officer

Exhibit Index

Exhibit

No.

99.1 - Press Release issued November 16, 2023

99.1

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 16, 2023) – The Cato Corporation (NYSE:

CATO)

today reported a net loss of $6.1

million or ($0.30) per diluted share for the third quarter ended October

28, 2023, compared to a net loss of $4.5 million or

($0.21) per diluted share for the third quarter ended October 29, 2022.

Sales for the third quarter ended October 28, 2023 were $156.7 million,

a decrease of 10% from sales of $174.9 million

for the third quarter ended October 29, 2022.

The Company’s same-store sales for the quarter decreased 8% compared to

2022.

For the nine months ended October 28, 2023, the Company reported a net

loss of $0.5 million or ($0.02) per diluted share,

compared to net income of $3.0 million or $0.14 per diluted share for the nine

months ended October 29, 2022.

Sales for

the nine months ended October 28, 2023 were $528.2 million, a decrease of 8%

to sales of $574.9 million for the nine

months ended October 29, 2022.

Year-to-date same-store sales decreased 6% compared to 2022.

“Our year-to-date sales trend continues to be negatively impacted by declining spending on goods

versus services, as well

as our customers’ discretionary spending levels,” stated

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

“Our gross margin rate continues to improve compared to 2022, as we continue to focus

on controlling our inventory in

this difficult economic environment.

However given the current economic conditions, we believe that

the fourth quarter

will remain challenging.”

Gross margin increased from 29.3% to 32.5% of sales in the quarter due

to higher merchandise margins, partially offset

by increased freight and occupancy costs as a percent of sales.

SG&A expenses as a percent of sales increased from

35.1% to 39.4% of sales during the quarter primarily due to increased payroll

and insurance expense. Tax benefit for the

quarter was $4.3 million versus a $4.7 million tax benefit in the prior year.

Year

-to-date gross margin increased to 34.6% of sales from 32.5% in the prior year

primarily due to increased

merchandise margins, partially offset by occupancy costs as a percent of sales.

The year-to-date SG&A rate was 35.1%

versus 31.8% primarily due to increased payroll and insurance expense.

Tax benefit for the nine-month period was $0.8

million compared to $3.0 million tax expense last year.

During the third quarter ended October 28, 2023, the Company

opened one store and closed three stores.

Year-to-date,

the Company opened nine stores and closed 44 stores.

As of October 28, 2023, the Company has 1,245 stores in 31 states,

compared to 1,317 stores in 32 states as of October 29, 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 October 28, 2023 AND October 29, 2022

(Dollars in thousands, except per share data)

Quarter Ended

Six Months Ended

October 28,

October 29,

October 28,

October 29,

2023

Sales

2022

Sales

2023

Sales

2022

Sales

REVENUES

Retail sales

156,682

100.0%

174,921

100.0%

528,174

100.0%

574,860

100.0%

Other revenue (principally finance,

late fees and layaway charges)

1,574

1.0%

1,705

1.0%

5,003

0.9%

5,351

0.9%

Total revenues

158,256

101.0%

176,626

101.0%

533,177

100.9%

580,211

100.9%

GROSS MARGIN (Memo)

50,850

32.5%

51,169

29.3%

182,638

34.6%

187,116

32.5%

COSTS AND EXPENSES, NET

Cost of goods sold

105,832

67.5%

123,752

70.7%

345,536

65.4%

387,744

67.5%

Selling, general and administrative

61,792

39.4%

61,397

35.1%

185,344

35.1%

182,606

31.8%

Depreciation

2,504

1.6%

2,864

1.6%

7,371

1.4%

8,418

1.5%

Interest and other income

(1,523)

-1.0%

(2,278)

-1.3%

(3,754)

-0.7%

(4,565)

-0.8%

Costs and expenses, net

168,605

107.6%

185,735

106.2%

534,497

101.2%

574,203

99.9%

Income Before Income Taxes

(10,349)

-6.6%

(9,109)

-5.2%

(1,320)

-0.3%

6,008

1.0%

Income Tax Expense

(4,272)

-2.7%

(4,656)

-2.7%

(797)

-0.2%

2,988

0.5%

Net Income (Loss)

(6,077)

-3.9%

(4,453)

-2.5%

(523)

-0.1%

3,020

0.5%

Basic Earnings Per Share

(0.30)

(0.21)

(0.02)

0.14

Diluted Earnings Per Share

(0.30)

(0.21)

(0.02)

0.14

THE CATO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

October 28,

October 29,

2023

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

25,024

20,005

Short-term investments

93,552

108,652

Restricted cash

3,908

3,787

Accounts receivable - net

31,115

26,497

Merchandise inventories

98,872

112,056

Other current assets

8,591

6,676

Total Current Assets

261,062

277,673

Property and Equipment - net

66,302

70,382

Noncurrent Deferred Income Taxes

10,977

9,213

Other Assets

25,444

21,596

Right-of-Use Assets, net

123,583

174,276

TOTAL

487,368

553,140

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

132,793

135,597

Current Lease Liability

51,431

67,360

Noncurrent Liabilities

14,683

16,183

Lease Liability

71,143

107,407

Stockholders' Equity

217,318

226,593

TOTAL

487,368

553,140

Document and Entity Information	Nov. 16, 2023
Document and Entity Information [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 16, 2023
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