What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-03-23 compared with 2022-03-23 · 468 added, 510 removed, 984 unchanged (50% of the section changed)

5 unchanged sentences

for the fiscal

years ended January 29, 2022, January 30, 2021 and February 1, 2020 ................................

years ended January 28, 2023, January 29, 2022 and January 30, 2021 ................................

Consolidated Balance Sheets at January 28, 2023 and January 29, 2022

2 unchanged sentences

January 29, 2022

and February 1, 2020................................

and January 30, 2021................................

................................................................

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Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 28,

January 30, 2021 and February 1, 2020 ................................................................

January 29, 2022 and January 30, 2021 ................................................................

............................

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and Qualifying Accounts for the fiscal years ended January 28, 2023,

January 30, 2021 and February 1, 2020 ................................................................

January 29, 2022 and January 30, 2021 ................................................................

............................

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Board of Directors and Stockholders of The Cato Corporation

Opinions on the Financial Statements and Internal

Control over Financial Reporting

We have audited the accompanying consolidated balance

sheets of The Cato Corporation and its

Opinions on the Financial Statements and Internal Control over Financial

We have audited the accompanying consolidated balance sheets of The Cato Corporation and its

subsidiaries (the “Company”) as of January 28, 2023 and

January 29, 2022, and the related consolidated

statements of income (loss) and comprehensive income (loss),

of stockholders’ equity and of cash flows

for each of the three years in the period ended January 29, 2022,

including the related notes and financial

statement schedule listed in the accompanying index (collectively

referred to as the “consolidated

statements of income (loss) and comprehensive income (loss), of stockholders’

equity and of cash flows

for each of the three years in the period ended January 28, 2023, including

the related notes and financial

statement schedule listed in the accompanying index (collectively referred

to as the “consolidated

financial statements”).

We also have audited the Company's

internal control over financial reporting as of

We also have audited the Company's internal control over financial reporting as of

January 28, 2023, based on criteria established in

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(2013) issued

by the Committee of Sponsoring Organizations of the

Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred

to above present fairly, in all material

by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above

present fairly, in all material

respects, the financial position of the Company as of January 28, 2023

and January 29, 2022, and the

results of its operations and its cash flows for each of the

three years in the period ended January 29,

2022 in conformity with accounting principles generally

accepted in the United States of America.

our opinion, the Company maintained, in all material

respects, effective internal control over financial

reporting as of January 29, 2022, based on criteria established

Internal Control - Integrated

results of its operations and its cash flows for each of the three years

in the period ended January 28, 2023

in conformity with accounting principles generally accepted in the United

States of America.

opinion, the Company maintained, in all material respects, effective internal control

over financial

reporting as of January 28, 2023, based on criteria established in

Internal Control - Integrated Framework

(2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated

financial statements, for maintaining

effective internal control over financial reporting, and for

its assessment of the effectiveness of internal

control over financial reporting, included in Management’s

Report on Internal Control Over Financial

The Company's management is responsible for these consolidated financial

statements, for maintaining

effective internal control over financial reporting, and for its assessment of the effectiveness of internal

control over financial reporting, included in Management’s Report on Internal Control Over Financial

Reporting appearing under Item 9A.

Our responsibility

is to express opinions on the Company’s

consolidated financial statements and on the Company's

internal control over financial reporting based on

We are a public accounting firm registered with the

Public Company Accounting Oversight

Board (United States) (PCAOB) and are required to be independent

with respect to the Company in

Our responsibility is to express opinions

on the Company’s

consolidated financial statements and on the Company's internal control over

financial reporting based on

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (PCAOB) and are required to be independent with

respect to the Company in

accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities

federal securities laws and the applicable rules

and regulations of the Securities

and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that

we plan and perform the audits to obtain reasonable assurance

about whether the consolidated financial

statements are free of material misstatement, whether due

to error or fraud, and whether effective

internal control over financial reporting was maintained

in all material respects.

Our audits of the consolidated financial statements included

performing procedures to assess the risks of

material misstatement of the consolidated financial statements,

whether due to error or fraud, and

we plan and perform the audits to obtain reasonable assurance about

whether the consolidated financial

statements are free of material misstatement, whether due to error or fraud,

and whether effective internal

control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing

procedures to assess the risks of

material misstatement of the consolidated financial statements, whether

due to error or fraud, and

performing procedures that respond to those risks.

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included examining, on a test basis,

evidence regarding the amounts and disclosures in the

consolidated financial statements.

evidence regarding the amounts and disclosures in the consolidated financial

Our audits also

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Our audit of internal

control over financial reporting included obtaining an

understanding of internal control over financial

control over financial reporting included obtaining an understanding

of internal control over financial

reporting, assessing the risk that a material weakness exists, and testing

and evaluating the design and

operating effectiveness of internal control based on the

assessed risk.

Our audits also included performing

operating effectiveness of internal control based on the assessed risk.

also included performing

such other procedures as we considered necessary in the circumstances.

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provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control

over Financial Reporting

A company’s internal control over financial reporting is a process

designed to provide reasonable

assurance regarding the reliability of financial reporting and

the preparation of financial statements for

external purposes in accordance with generally accepted

accounting principles.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable

assurance regarding the reliability of financial reporting

and the preparation of financial statements for

external purposes in accordance with generally accepted accounting

A company’s internal

control over financial reporting includes those policies

and procedures that (i) pertain to the maintenance

of records that, in reasonable detail, accurately and fairly

reflect the transactions and dispositions of the

control over financial reporting includes those policies and procedures

that (i) pertain to the maintenance

of records that, in reasonable detail, accurately and fairly reflect the transactions

and dispositions of the

assets of the company;

(ii) provide reasonable assurance

that transactions are recorded as necessary to

permit preparation of financial statements in accordance with

generally accepted accounting principles,

and that receipts and expenditures of the company are

being made only in accordance with authorizations

(ii) provide reasonable assurance that transactions

are recorded as necessary to

permit preparation of financial statements in accordance with generally

accepted accounting principles,

and that receipts and expenditures of the company are being made

only in accordance with authorizations

of management and directors of the company;

provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition,

use, or disposition of the company’s assets

that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial

reporting may not prevent or detect

and (iii) provide

reasonable assurance regarding prevention

or timely detection of unauthorized acquisition, use, or disposition

of the company’s assets that could

have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting

may not prevent or detect

misstatements.

Also, projections of any evaluation of effectiveness

to future periods are subject to the risk

that controls may become inadequate because of changes in conditions,

or that the degree of compliance

Also, projections of any evaluation of effectiveness to future periods

are subject to the risk

that controls may become inadequate because of changes in conditions, or

that the degree of compliance

with the policies or procedures may deteriorate.

2 unchanged sentences

from the current period audit of the

consolidated financial statements that was communicated

or required to be communicated to the audit

committee and that (i) relates to accounts or disclosures

that are material to the consolidated financial

statements and (ii) involved our especially challenging, subjective,

or complex judgments.

communication of critical audit matters does not alter in any

way our opinion on the consolidated

statements, taken as a whole, and we are not, by communicating the

critical audit matter below, providing a

separate opinion on the critical audit matter or on the accounts

or disclosures to which it relates.

consolidated financial statements that was communicated or required to

be communicated to the audit

committee and that (i) relates to accounts or disclosures that are material

to the consolidated financial

statements and (ii) involved our especially challenging, subjective, or

complex judgments.

communication of critical audit matters does not alter in any way our opinion on

the consolidated

statements, taken as a whole, and we are not, by communicating

the critical audit matter below, providing a

separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

Impairment of Long-Lived Assets - Store Location Asset Groupings

As described in Notes 1 and 6 to the consolidated financial

statements, the Company’s consolidated

property and equipment, net balance was $63.1 million, of which

the store locations were a portion, and

consolidated operating lease right-of-use assets, net balance

was $181.3 million as of January 29, 2022.

As described in Notes 1 and 6 to the consolidated financial statements,

the Company’s consolidated

property and equipment, net balance was $70.4 million, of which the store

locations were a portion, and

consolidated operating lease right-of-use assets, net balance was $174.3

million as of January 28, 2023.

The Company invests in leaseholds, right-of-use assets and equipment,

primarily in connection with the

opening and remodeling of stores, and in computer software

and hardware.

opening and remodeling of stores, and in computer software and hardware.

The Company periodically

reviews its store locations and estimates the recoverability

of its long-lived assets, which primarily relate

to fixtures and equipment, leasehold improvements, right-of-use

assets net of lease liabilities, and

reviews its store locations and estimates the recoverability of its

long-lived assets, which primarily relate

to fixtures and equipment, leasehold improvements, right-of-use assets net

of lease liabilities, and

information technology equipment and software.

An impairment charge

is recorded for the amount by

which the carrying value exceeds the estimated fair value

when management determines that projected

cash flows associated with those long-lived assets will not

be sufficient to recover the carrying value.

determination is based on a number of factors, including

the store’s historical operating results and future

An impairment

charge is recorded for the amount by

which the carrying value exceeds the estimated fair value when management

determines that projected

cash flows associated with those long-lived assets will not be sufficient to recover

the carrying value.

determination is based on a number of factors, including the store’s historical operating results and future

projected cash flows, which include contribution margin projections.

The Company assesses the fair value

of each lease by considering market rents and any lease

terms that may adjust market rents under certain

conditions such as the loss of an anchor tenant or a leased

space in a shopping center not meeting certain

An impairment charge for store assets of $0.9

million was recorded during the year ended

assesses the fair value

of each lease by considering market rents and any lease terms

that may adjust market rents under certain

conditions such as the loss of an anchor tenant or a leased space in a shopping

center not meeting certain

An impairment charge for store assets of $0.9 million was recorded during

the year ended

January 28, 2023.

The principal considerations for our determination that

performing procedures relating to the

impairment of long-lived assets – store location asset groupings

is a critical audit matter are (i) the

significant judgment by management when determining the fair

value measurement of the store location

asset groupings, which led to (ii) a high degree of auditor

judgment, subjectivity, and effort in performing

procedures and evaluating management’s projected cash flow

assumptions related to contribution margin

Addressing the matter involved performing procedures

and evaluating audit evidence in connection with

The principal considerations for our determination that performing

procedures relating to the impairment

of long-lived assets – store location asset groupings is a critical audit matter

are (i) the significant

judgment by management when determining the fair value measurement

of the store location asset

groupings, which led to (ii) a high degree of auditor judgment, subjectivity, and effort in performing

procedures and evaluating management’s projected cash flow assumptions related to contribution margin

Addressing the matter involved performing procedures and evaluating

audit evidence in connection with

forming our overall opinion on the consolidated financial statements.

These procedures included testing

the effectiveness of controls relating to management’s long

-lived assets – store location recoverability test

the effectiveness of controls relating to management’s long-lived assets – store location recoverability test

and determination of the fair value of the asset group.

These procedures also included, among others (i)

testing the completeness and accuracy of underlying data

used in the projected cash flows and store

location asset groupings, (ii) evaluating the reasonableness

of management’s assumptions related to

contribution margin projections by considering current

and historical performance of the store location

asset groupings and whether the assumptions were consistent

with evidence obtained in other areas of the

audit, (iii) evaluating the appropriateness of the projected

cash flow model, and (iv) evaluating

management’s assessment of the fair value of the leased assets

included in the store location asset

These procedures

also included, among others (i)

testing the completeness and accuracy of underlying data used in the projected

cash flows and store

location asset groupings, (ii) evaluating the reasonableness of management’s assumptions related to

contribution margin projections by considering current and historical performance

of the store location

asset groupings and whether the assumptions were consistent with evidence

obtained in other areas of the

audit, (iii) evaluating the appropriateness of the projected cash flow model,

and (iv) evaluating

management’s assessment of the fair value of the leased assets included in the store location asset

PricewaterhouseCoopers LLP

1 unchanged sentence

March 23, 2023

We have served as the Company’s auditor since 2003.

We have served as the Company’s

auditor since 2003.

THE CATO CORPORATION

5 unchanged sentences

January 29, 2022

February 1, 2020

January 30, 2021

(Dollars in thousands, except per share data)

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Interest and other income

Cost and expenses, net

Costs and expenses, net

Income (loss) before income taxes

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and 2020, respectively

Comprehensive income (loss)

Comprehensive (loss) income

See notes to consolidated financial statements.

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January 29, 2022

February 1, 2020

January 30, 2021

(Dollars in thousands)

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Net income (loss)

Adjustments to reconcile net income to net cash provided

Adjustments to reconcile net income (loss) to net cash provided

by (used in) operating activities:

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Net cash used in financing activities

Net increase (decrease) in cash, cash equivalents, and restricted cash

Net increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash at beginning of period

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Accrued plant and equipment

Accrued treasury stock

See notes to consolidated financial statements.

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Unrealized gains (loss) on available-for-sale securities, net of

deferred income tax liability of $

deferred income tax benefit of $

Dividends paid ($

Class A common stock sold through employee stock purchase

Class A common stock issued through restricted stock grant plans

Share-based compensation expense

Repurchase and retirement of treasury shares

Balance — February 1, 2020

Balance — January 30, 2021

Comprehensive income:

4 unchanged sentences

Class A common stock sold through employee stock purchase

Class A common stock issued through restricted stock grant plans

Share-based compensation expense

Repurchase and retirement of treasury shares

6 unchanged sentences

Class A common stock sold through employee stock purchase

Class A common stock issued through restricted stock grant plans

Share-based compensation expense

Repurchase and retirement of treasury shares

2 unchanged sentences

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATE

Summary of Significant Accounting Policies:

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“Cato Fashions,”

located primarily in

strip shopping

centers principally in

the southeastern

United States.

The Company’s

fiscal year ends on the Saturday nearest January 31 of the subsequent year.

“It’s Fashion,” “It’s

Fashion Metro,” “Versona

and “Cache,” including e-commerce websites.

Company’s fiscal year ends

on the Saturday nearest January 31 of the subsequent year.

Fiscal years 2022,

2021 and 2020 are

generally accepted

management to

compensation, general and auto insurance liabilities, reserves relating to self-insured health

insurance, and

uncertain tax positions.

compensation,

uncertain tax positions and valuation allowances on deferred tax

original maturities of three months or less.

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received, for

years ended January

2023, January

2021 and February 1,

and a refund of $

and a payment of $

, respectively.

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Leasehold improvements are amortized over the

shorter of the estimated

shorter of the estimated useful

life or lease term.

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deferred compensation assets and land held for investment purposes.

Balance as of

January 28, 2023

January 29, 2022

(Dollars in thousands)

3 unchanged sentences

Land Held for Investment

Codification (“ASC”)

amendments issued

requires lessees

allowances and rent escalations.

For purposes of recognizing incentives and minimum rental expenses on

THE CATO CORPORATION

1 unchanged sentence

— (Continued)

classification

accounting for sales-type and direct financing leases.

The Company utilized a comprehensive

approach to assess the impact

of this guidance on its

statements and

related disclosures, including

liabilities on

comprehensive

The Company reviewed its internal controls over leases and, as a result, the Company enhanced

corresponding

administering

facilitating compliance with the new guidance.

The Company elected

the transition

practical expedients that

The package of practical expedients

allows the Company to not

reassess previous accounting conclusions

regarding whether existing arrangements are or contain leases, the classification

of existing leases, and the

allowed for by

the new standard,

which allows entities to

use hindsight when

determining lease term and

impairment of right-of-use assets.

The Company adopted ASC 842

utilizing the modified retrospective approach

as of February 3,

retrospective

recognition of

existing leases

the beginning

adoption (i.e.,

which does not require the adjustment of comparative periods.

11 for further information.

Company leases

contain construction

and rent escalations.

For purposes of recognizing

incentives and minimum rental

expenses on a

a straight-line basis over the terms of the leases, including renewal periods considered reasonably

the Company begins amortization

initial possession date which

is when the Company

space and begins to make improvements in preparation for intended use.

takes possession

merchandise and

the purchase,

generally with cash

merchandise and pays

purchase, generally with

E-commerce sales

10 unchanged sentences

from historical amounts.

A provision is made for estimated write-offs associated with sales

made with the

Amounts related

handling billed

shipping product

(billed and accrued) are classified as Cost of goods sold.

A provision is made

for estimated write-offs associated with sales made with the

proprietary credit

estimated rewards

purchases with the

Company’s propriety

Amounts related to

shipping and handling

billed to customers

transaction are classified

as Other revenue

and the costs

related to shipping

product to customers (billed and accrued) are classified as Cost of goods

In accordance with ASU 2014-09,

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breakage percentage

redeemed gift cards.

See Note 2 for further information on miscellaneous

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

miscellaneous

issued by the Company have a 90-day expiration.

proprietary credit

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payroll-related

Occupancy expenses include rent, real

estate taxes, insurance, common area

maintenance, utilities

distribution,

not capitalized

costs associated

with shipping goods to customers are recorded as a component of Cost

of goods sold.

associated with shipping goods to customers are recorded as a component

of Cost of goods sold.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

expense was approximately $

for the fiscal years ended January 28,

2022, January 30, 2021 and February 1, 2020, respectively.

2023, January 29, 2022 and January 30, 2021, respectively.

Stock Repurchase Program:

35 unchanged sentences

Stock Purchase Plan.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

The following

2 unchanged sentences

ended January

29, 2022, January 30, 2021 and February 1, 2020:

28, 2023, January 29, 2022 and January 30, 2021:

Fiscal Year Ended

1 unchanged sentence

January 29, 2022

February 1, 2020

January 30, 2021

(Dollars in thousands)

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The Company does not receive cooperative advertising allowances.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Company’s assets and liabilities.

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The Company has

incurred, which is included as a component of its current year provision for

income taxes.

incurred, which is included as a component of its current year provision

for income taxes.

construction,

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amounts paid against such claims,

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

not discounted.

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all stock awards based

date fair value and 2) adjustments for the effects of actual forfeitures versus initial estimated

Recently Adopted Accounting Policies:

In December 2019, the FASB

issued ASU 2019-12,

taxes that are

partially based on income,

transactions with a

government that result in

goodwill, separate

Company adopted

Reform on Financial Reporting

The ASU, and subsequent

clarifications, provide practical expedients for

contract modification

accounting related

transition away

London Interbank

(LIBOR) and other interbank offering rates to alternative reference rates.

The expedients are applicable to

contract modifications made and hedging relationships entered into

on or before December 31, 2022.

Company adopted

impact on its Condensed Consolidated Financial Statements.

date fair value and 2) adjustments for the effects of actual forfeitures versus initial

estimated forfeitures.

Board issued Accounting Standards Update 2021-10,

Government Assistance (Topic

Disclosures by

government assistance,

including the

disclosure of

assistance an

entity receives,

accounting for

government assistance

the assistance

Company adopted this standard on a prospective basis on January 30, 2022.

Pronouncements:

pronouncements and believe none will have a material impact on

the Company’s financial statements.

THE CATO CORPORATION

3 unchanged sentences

The components of Interest and other income are shown below (in thousands):

Fiscal Year Ended

January 28, 2023

January 29, 2022

February 1, 2020

January 30, 2021

Dividend income

Interest income

State recovery grant

Insurance proceeds

Miscellaneous income

1 unchanged sentence

Interest and other income

During 2020, the Company recorded a gain on

the sale of land held for investment

million within

Statements of

Income (Loss) and Comprehensive Income (Loss).

COVID-19 pandemic.

Additionally,

Company received

million in property insurance claims, including business interruption, from Hurricanes

Ida and Laura

investment of $

Short-Term Investments:

22 unchanged sentences

short-term investments

accumulated unrealized

these investments

(in thousands):

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

January 28, 2023

7 unchanged sentences

Fair Value Measurements:

The following tables set forth information regarding the Company’s

financial assets that are measured

The following tables set forth information regarding the Company’s financial

assets that are measured

at fair value as of January 28, 2023 and January 29, 2022 (in thousands):

29 unchanged sentences

have contractual

maturities which range from three

days to 4.9 years.

Notes and Certificates of

These securities are classified as

maturities which

Certificates of

These securities are

classified as

available-for-sale

and Other assets on the accompanying

Balance Sheets.

These assets are carried

unrealized gains

Accumulated other

investments and Other

assets on the

accompanying Consolidated Balance

are carried at

comprehensive

The asset-backed

of auto loans

and bank credit

loan asset-backed

The asset-backed securities are bonds comprised of auto loans and bank credit cards that carry AAA

The auto loan asset-backed

securities are backed by static pools of

auto loans that were originated and

THE CATO CORPORATION

1 unchanged sentence

— (Continued)

finance units,

finance companies.

card receivables

securities are backed by revolving pools of credit

card receivables generated by account holders of cards

American Express, Citibank, JPMorgan Chase, Capital One,

and Discover.

Additionally,

2 unchanged sentences

At January 29, 2022, the Company had

category securities

and municipal

not be available

active exchanges

for identical

value is principally

market values

by management with assistance of a

third-party pricing service.

Since quoted prices in

active markets for

identical assets

are not available,

these prices are determined

by the pricing service

using observable

characteristics,

other factors.

investment securities include corporate and municipal bonds for which quoted prices may

not be available on

active exchanges for identical instruments.

Their fair value is principally based on market values determined

identical assets are

not available, these

prices are determined

by the pricing

service using observable

characteristics, among other factors.

policies are valued based on the cash surrender value of the insurance contract, which is determined based

8 unchanged sentences

— (Continued)

The following

tables summarize

The following tables summarize

the change in fair

value of the Company’s

assets and liabilities

as of January

financial assets and liabilities

measured using Level 3 inputs as of

January 28, 2023 and

January 29, 2022

21 unchanged sentences

Surrender Value

Beginning Balance at February 1, 2020

Beginning Balance at January 30, 2021

Total gains or (losses)

5 unchanged sentences

Liability Inputs (Level 3)

Beginning Balance at February 1, 2020

Beginning Balance at January 30, 2021

Total (gains) or losses

20 unchanged sentences

years ended January 28, 2023, January 29, 2022

and February 1,

and January 30,

respectively,

15 unchanged sentences

Construction in progress primarily represents costs related to new

store development and

investments in new technology.

store development,

distribution center improvements and investments in new technology.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Accrued Expenses:

Accrued expenses consist of the following (in thousands):

January 28, 2023

January 29, 2022

Accrued employment and related items

1 unchanged sentence

Accrued self-insurance

Prior period balances in the table above have been reclassified

to conform to current

period presentation.

THE CATO CORPORATION

2 unchanged sentences

Financing Arrangements:

unsecured revolving credit

The Company is in the process of

obtaining a new revolving credit agreement

agreement contains

covenants and limitations, including the maintenance of specific financial ratios with

was in compliance

as of January

no borrowings

2022, January 30,

weighted average

no borrowings

29, 2022, January

30, 2021 and February

1, 2020, the Company

had no outstanding

unsecured revolving

credit agreement,

which provided

borrowings of

any revocable

credit related

credit agreement

contains various

was in compliance as of January 28, 2023.

borrowings outstanding under this credit facility as

of January 28,

2023 or January

At January 28,

2023, the weighted

average interest rate

credit facility was

borrowings outstanding at the end of

outstanding revocable

relating to purchase commitments.

Stockholders’ Equity:

one vote per share

Class B Common Stock are entitled

to ten votes per

ten votes per share

Each share of

1 unchanged sentence

converted at any time into one share of Class A Common Stock

Subject to the rights of

the holders of any

Subject to the rights of the holders of any

Preferred Stock

2 unchanged sentences

dissolution or

distribution of $1.00 per share

of the net assets

of the Company.

distribution of $

per share of the

net assets of the Company.

Cash dividends on the

10 unchanged sentences

Class B Common

partnerships controlled

Company’s employee benefit

5 unchanged sentences

requirements.

contribute up

annual compensation

maximum elective

deferral, designated

The 401(k) plan allows participants to

contribute up to 75 % of their annual compensation up to the maximum elective deferral, designated by

administrative

6 unchanged sentences

, respectively.

non-contributory

covers substantially all

associates who meet

minimum age and

service requirements.

The Company has a trusteed, non-contributory Employee Stock Ownership Plan (“ESOP”), which

covers substantially all associates who meet minimum age and service requirements

Company’s discretionary

2 unchanged sentences

Compensation Committee of the

$15,000,000 was contributed in the third

quarter of fiscal 2021.

The Company’s contribution

for the years ended January 30, 2021 and February 1, 2020,

contribution to

ended January

respectively.

16 unchanged sentences

the historical

trend is not indicative of future trends, then the Company may be required to

record additional expense or

trend is not indicative of future trends, then the Company may be required to record

additional expense or

a reduction to expense which

4 unchanged sentences

The Company funds healthcare contributions to a third-party

The Company determines

whether an arrangement is

a lease at inception.

The Company has operating

The Company determines whether an

arrangement is a lease

at inception.

The Company has

warehouse space

and equipment.

have remaining

which include

terminate the

considers these

determining the

, some of which include options to

extend the lease term for

up to five years

, and some of

within one year

Company considers

establish its

right-of-use assets

lease agreements

do not contain any material residual value guarantees or material

lease agreements do not contain any material residual value guarantees or material

restrictive covenants.

1 unchanged sentence

The components of lease cost are shown below (in thousands):

Twelve Months Ended

Fiscal Year Ended

January 28, 2023

6 unchanged sentences

ended January 28, 2023 and January 29, 2022, respectively.

(b) Primarily related to monthly percentage rent for stores not presented on the balance sheet.

Supplemental cash

flow information

activity related

operating leases

(b) Primarily relates to monthly percentage rent for stores not presented on the balance sheet.

Supplemental cash flow

information and

non-cash activity related

Company’s operating

are as follows (in thousands):

Operating cash flow information:

Twelve Months Ended

Fiscal Year Ended

January 28, 2023

7 unchanged sentences

Weighted-average

remaining lease

discount rate

30 unchanged sentences

Income (Loss) for the years ended January 28, 2023, January 29, 2022

and February 1, 2020, respectively.

and January 30, 2021, respectively.

jurisdictions,

3 unchanged sentences

ending amount

unrecognized tax

unrecognized tax benefits

(in thousands):

2 unchanged sentences

— (Continued)

January 28, 2023

January 29, 2022

January 30, 2021

Balances, beginning

5 unchanged sentences

Balances, ending

The provision

taxes consists

(in thousands):

The provision for income taxes consists of

the following (in thousands):

January 28, 2023

January 29, 2022

January 30, 2021

Current income taxes:

4 unchanged sentences

— (Continued)

Significant components

Company’s deferred tax assets and liabilities as of

January 29, 2022 and

components of

Company’s deferred

and liabilities

January 29, 2022 are as follows

(in thousands):

11 unchanged sentences

Lease liabilities

Property and equipment

Total deferred

3 unchanged sentences

Deferred tax liabilities:

Property and equipment

Accrued self-insurance reserves

Right-of-Use assets

Accrued self-insurance reserves

Total deferred

8 unchanged sentences

Allowance Ending Balance

As of January

set to expire

As of January 28, 2023, the Company had $

million of state tax credits to offset future state income tax

expense, which are set to expire

by fiscal 2023.

January 29, 2022,

the Company had

$4.2 million of

operating loss carryforwards.

the likelihood

that deferred

loss carryforwards

adverse impact

Company’s financial

statements and

operations due

Based on this assessment,

the Company concluded

that it is more likely than not the Company

will not be able to realize net operating losses and, accordingly,

has recorded a valuation allowance

change in the

valuation allowance for January 29,

Based on the available evidence, the

Company has recorded

a valuation allowance of $

carryforwards.

Company assessed the likelihood that deferred tax assets related to state net operating loss carryforwards will

this assessment, the

Company concluded

able to realize

million of the

net operating losses

and, accordingly, has

recorded a valuation

allowance for the same amount.

The net change

in the valuation

for the years

ended January 28, 2023 and January 29,

due to state net operating losses and

state tax credits.

undistributed

indefinitely.

THE CATO CORPORATION

1 unchanged sentence

— (Continued)

undistributed earnings indefinitely.

Future unremitted earnings when distributed are expected

distributions of GILTI-previously taxed income or eligible for a

100% dividends received deduction.

withholding tax

distributions

GILTI-previously

dividends received

approximately $

$26.9 million

from non-U.S.

million of earnings from non-U.S.

subsidiaries.

2 unchanged sentences

— (Continued)

The reconciliation

Company’s effective

The reconciliation of the Company’s effective

income tax rate with the

statutory rate is as follows:

January 28, 2023

January 29, 2022

January 30, 2021

Federal income tax rate

14 unchanged sentences

Reportable Segment Information:

determined that

reportable segments:

aggregated its three

retail operating segments,

including e-commerce,

aggregation criteria

outlined in ASC 280-10, which

states that two or

more operating

into a single

if aggregation

is consistent

principles of

280-10, which

more operating segments may be aggregated into a single reportable segment if aggregation is consistent with

characteristics, products, production processes, clients and

methods of distribution.

characteristics

of distribution.

The Company’s retail

operating segments have similar economic characteristics

and similar operating,

financial and

competitive risks.

product offered,

Merchandise inventory

Merchandise for the Company’s retail operating segments

is distributed to retail stores in a

Merchandise for

the Company’s

retail operating

distributed to

retail stores

similar manner

distribution center

subsequently distributed to

authorizations, payment

and collection

are performed

by a separate

authorizations,

processing, and collection efforts are performed by

a separate subsidiary of the Company.

THE CATO CORPORATION

1 unchanged sentence

— (Continued)

The following

(in thousands):

The following schedule summarizes certain segment

information (in thousands):

Interest and other income

9 unchanged sentences

Total assets as of January 29,

The accounting policies

of the segments are the same as those described

in the Summary of Significant

based on profit

or loss from operations

following schedule summarizes the

direct expenses of

The accounting

the segments are

described in the

Accounting Policies in

evaluates performance based on

profit or loss from

before income taxes.

The Company does not

allocate certain corporate expenses to the

credit segment.

and administrative

(in thousands):

Selling, general and administrative expenses (in thousands):

January 28, 2023

January 29, 2022

February 1, 2020

January 30, 2021

Other expenses

1 unchanged sentence

Stock Based Compensation:

2022, the Company had two long-term

plans pursuant

to which stock-

Plan are for the

granting of various forms of equity-based awards,

2023, the Company

long-term compensation plans

pursuant to which

Compensation Plan

equity-based awards,

including restricted

and stock options for grant, to officers, directors and key employees.

Effective May 24, 2018,

shares for grant

THE CATO CORPORATION

1 unchanged sentence

— (Continued)

were no longer available under

the 2013 Incentive Compensation Plan.

The following table presents the number of options and shares of restricted

5 unchanged sentences

January 28, 2023

In accordance with ASC 718, the

fair value of current restricted

stock awards is estimated on

of grant based on the market price of the Company’s stock and is amortized to compensation expense on a

straight-line basis over a five-year

In accordance with

fair value of

current restricted stock

awards is estimated

date of grant based on the market price of the Company’s stock and is amortized to compensation expense

on a straight-line

vesting period.

As of January

29, 2022, there was

unrecognized compensation

expense related

restricted stock

awards, which

recognized over a remaining weighted-average vesting period of

The total grant date fair value

28, 2023, there

total unrecognized

compensation expense

unvested restricted

stock awards,

to be recognized over

a remaining weighted-average vesting period of

The total grant date fair

2023, January

, respectively.

compensation expense

resulting from

administrative

Consolidated Statements of Income (Loss) and Comprehensive Income

The following

shows the changes

in the shares of unvested

stock outstanding

(Loss) and Comprehensive Income (Loss).

The following summary shows

the changes in the

shares of unvested

restricted stock outstanding

the years ended January 28, 2023,

January 29, 2022 and January 30, 2021:

Weighted Average

2 unchanged sentences

Forfeited or expired

Restricted stock awards at February 1, 2020

Restricted stock awards at January 30, 2021

Forfeited or expired

2 unchanged sentences

Restricted stock awards at January 28, 2023

discount through payroll

twelve month period

ended January 29,

% discount through

payroll deductions.

month period ended

employees at an

average discount of

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Employee Stock Purchase Plan.

1 unchanged sentence

recognized for the

discount given under

% discount given

approximately

5 unchanged sentences

administrative expenses.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Commitments and Contingencies:

20 unchanged sentences

Accumulated Other Comprehensive Income:

information regarding

reclassification out

Accumulated other

comprehensive

(in thousands)

reclassification

comprehensive income (in thousands) as of

January 28, 2023:

Changes in Accumulated Other

15 unchanged sentences

(b) Includes $

impact of accumulated other comprehensive income reclassifications into Interest and

other income for net gains on available-for-sale securities.

The tax impact of this reclassification was $

Amounts in parentheses indicate a debit/reduction to OCI.

impact of accumulated other comprehensive income reclassifications into Interest and other

income for net gains on available-for-sale securities.

tax impact of this reclassification was $

in parentheses indicate a debit/reduction to OCI.

THE CATO CORPORATION

9 unchanged sentences

Available-for-Sale

Beginning Balance at February 1, 2020

Beginning Balance at January 30, 2021

Other comprehensive income (loss) before

6 unchanged sentences

Amounts in parentheses indicate a debit/reduction to

(b) Includes $

impact of accumulated other comprehensive income reclassifications into Interest and other

1 unchanged sentence

tax impact of this reclassification was $

in parentheses indicate a debit/reduction to OCI.

Changes in and Disagreements with Accountants on Accounting and Financial

parentheses indicate a debit/reduction to OCI.

Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure:

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data