What changed in this filing

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Item 1. Financial Statements

2024-05-30 compared with 2023-11-21 · 310 added, 507 removed, 356 unchanged (70% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS

OF INCOME (LOSS) AND

COMPREHENSIVE INCOME (LOSS)

OF INCOME AND

COMPREHENSIVE INCOME

Three Months Ended

Nine Months Ended

April 29, 2023

(Dollars in thousands, except per share data)

3 unchanged sentences

COSTS AND EXPENSES, NET

Cost of goods sold (exclusive of depreciation shown

Selling, general and administrative (exclusive of

Cost of goods sold (exclusive of depreciation shown below)

Selling, general and administrative (exclusive of depreciation

Interest and other income

Costs and expenses, net

Income (loss) before income taxes

Income tax (benefit) expense

Net income (loss)

Basic earnings (loss) per share

Diluted earnings (loss) per share

Income before income taxes

Income tax expense

Basic earnings per share

Diluted earnings per share

Comprehensive income:

Net income (loss)

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

deferred income taxes of $

for the three and

nine months ended October 28, 2023 and ($

the three and nine months ended October 29, 2022,

Comprehensive income (loss)

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

of deferred income taxes of $0 and $

for the three months ended May 4, 2024 and April 29, 2023,

Comprehensive income

See notes to condensed consolidated financial statements (unaudited).

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

October 28, 2023

January 28, 2023

February 3, 2024

(Dollars in thousands)

4 unchanged sentences

Accounts receivable, net of allowance for customer credit losses of

at October 28, 2023 and January 28, 2023, respectively

at May 4, 2024 and February 3, 2024, respectively

Merchandise inventories

2 unchanged sentences

Property and equipment – net

Noncurrent deferred income taxes

Right-of-Use assets – net

3 unchanged sentences

Accrued expenses

Accrued employee benefits and bonus

Accrued bonus and benefits

Accrued income taxes

6 unchanged sentences

par value per share,

authorized, none issued

Class A common stock, $

1 unchanged sentence

shares authorized;

issued at October 28, 2023 and January 28, 2023, respectively

shares issued

at May 4, 2024 and February 3, 2024, respectively

Convertible Class B common stock, $

1 unchanged sentence

shares authorized;

issued at October 28, 2023 and January 28, 2023, respectively

shares issued at May 4, 2024 and February 3, 2024

Additional paid-in capital

7 unchanged sentences

OF CASH FLOWS

Nine Months Ended

October 28, 2023

October 29, 2022

Three Months Ended

April 29, 2023

(Dollars in thousands)

Operating Activities:

Net income (loss)

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

by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for customer credit losses

Purchase premium and premium amortization of investments

Gain on sale of assets held for investment

Share-based compensation

Deferred income taxes

Loss on disposal of property and equipment

Changes in operating assets and liabilities which provided

Loss (Gain) on disposal of property and equipment

Changes in operating assets and liabilities which provided (used) cash:

Accounts receivable

9 unchanged sentences

Sales of short-term investments

Sales of other assets

Net cash provided by investing activities

3 unchanged sentences

Proceeds from employee stock purchase plan

Net cash used in financing activities

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

Net cash used by financing activities

Net increase in cash, cash equivalents, and restricted cash

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

1 unchanged sentence

Non-cash activity:

Accrued other assets and property and equipment

Accrued other assets and property and equipment expenditures

See notes to condensed consolidated financial statements (unaudited).

4 unchanged sentences

Stockholders'

Income (Loss)

(Dollars in thousands)

Balance — January 28, 2023

Comprehensive income:

Unrealized net gains on available-for-sale securities, net of

deferred income tax expense of $

Dividends paid ($

Class A common stock sold through employee stock purchase

Share-based compensation issuances and exercises

Share-based compensation expense

Repurchase and retirement of treasury shares

Balance — April 29, 2023

Comprehensive income:

Unrealized net gains on available-for-sale securities, net of

deferred income tax expense of $

Dividends paid ($

Class A common stock sold through employee stock purchase

Share-based compensation issuances and exercises

Share-based compensation expense

Repurchase and retirement of treasury shares

Balance — July 29, 2023

Balance — February 3, 2024

Comprehensive income:

Unrealized net gains on available-for-sale securities, net of

deferred income tax expense of $

Unrealized net gains on available-for-sale securities, net of deferred

income tax benefit of $0

Dividends paid ($

3 unchanged sentences

Repurchase and retirement of treasury shares

Balance — October 28, 2023

See notes to condensed consolidated financial statements (unaudited).

THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS

OF STOCKHOLDERS’ EQUITY

Balance — May 4, 2024

Comprehensive

Stockholders'

Income (Loss)

(Dollars in thousands)

1 unchanged sentence

Comprehensive income:

Unrealized net losses on available-for-sale securities, net of

deferred income tax benefit of $

Unrealized net losses on available-for-sale securities, net of deferred

income tax expense of $

Dividends paid ($

4 unchanged sentences

Balance — April 29, 2023

Comprehensive income:

Unrealized net gains on available-for-sale securities, net of

deferred income tax expense of $

Dividends paid ($

Class A common stock sold through employee stock purchase

Share-based compensation issuances and exercises

Share-based compensation expense

Repurchase and retirement of treasury shares

Balance — July 30, 2022

Comprehensive income:

Unrealized net losses on available-for-sale securities, net of

deferred income tax benefit of $

Dividends paid ($

Class A common stock sold through employee stock purchase

Share-based compensation issuances and exercises

Share-based compensation expense

Repurchase and retirement of treasury shares

Balance — October 29, 2022

See notes to condensed consolidated financial statements (unaudited).

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 1 - GENERAL

thirty-nine-week

periods ended October 28, 2023 and October 29, 2022 have been prepared from the accounting records

In the opinion of

management, all adjustments considered

necessary for a fair

presentation of

the financial statements have been included.

All such adjustments are of a normal, recurring nature unless

otherwise noted.

interim period

be indicative

results expected

thirteen-week

Corporation and

its wholly-owned

subsidiaries (the

“Company”), and

In the opinion of management, all adjustments considered necessary for a fair presentation of the financial

adjustments are

normal, recurring

nature unless

The results of the interim period may not be indicative of the results expected

for the entire year.

The interim financial

2 unchanged sentences

the consolidated financial statements

January 28, 2023.

Amounts as of January 28, 2023 have been derived from the audited balance sheet, but

February 3, 2024.

Amounts as of February 3, 2024 have been derived from the audited balance sheet, but

do not include all disclosures required by

accounting principles generally accepted in the United States of

On November 16, 2023, the Board of Directors maintained the quarterly

dividend at $

During the third quarter of the current fiscal year,

the Company received an estimate for costs to repair its

corporate jet,

sustained damage

Company determined

Management has determined that it is more

likely than not that the aircraft

will be sold within the next 12

Company reclassified the

an asset held

estimated fair value

million, which

the accompanying Condensed

Consolidated Balance Sheets

as of October 28, 2023.

On February 16, 2024, the Company closed on the sale of land held for investment.

The sale resulted in a

Consolidated Statements of Income and Comprehensive Income

for the period ended May 4, 2024.

On May 23, 2024, the Board of Directors maintained the quarterly dividend at

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 2 - EARNINGS PER SHARE:

7 unchanged sentences

The Company has presented one basic EPS and one diluted EPS amount for all common shares in

the accompanying Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).

incorporation

dividends on Class A shares without declaration of commensurate dividends on Class B shares, the Company

has historically paid the same dividends to both Class A and Class B shareholders

and the Board of Directors

has resolved to continue this

Accordingly, the Company’s allocation

of income for purposes

applicable to both Class A and Class

the accompanying

Condensed Consolidated

Statements of

Comprehensive Income.

Company’s certificate

of incorporation

declare dividends

historically paid the same dividends to both Class A and Class B shareholders and the

Board of Directors has

resolved to continue this practice.

Accordingly, the Company’s allocation of income for purposes of the EPS

computation is the same

for Class A and

Class B shares and

the EPS amounts reported

herein are applicable

to both Class A and Class B

weighted average

3 unchanged sentences

Three Months Ended

Nine Months Ended

April 29, 2023

(Dollars in thousands)

Net earnings (loss)

(Earnings) loss allocated to non-vested equity awards

Net earnings (loss) available to common stockholders

Earnings allocated to non-vested equity awards

Net earnings available to common stockholders

Basic weighted average common shares outstanding

Diluted weighted average common shares outstanding

Net income (loss) per common share

Basic earnings (loss) per share

Diluted earnings (loss) per share

Net income per common share

Basic earnings per share

Diluted earnings per share

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 3 – ACCUMULATED OTHER COMPREHENSIVE INCOME:

reclassification

comprehensive income (in thousands) for the

three months ended October 28, 2023:

comprehensive income (loss) (in thousands) for

the three months ended May 4,

Changes in Accumulated Other

Comprehensive Income (a)

Comprehensive Income (Loss) (a)

Unrealized Gains

1 unchanged sentence

Available-for-Sale

Beginning Balance at July 29, 2023

Other comprehensive income before

Beginning Balance at February 3, 2024

Other comprehensive income (loss) before

reclassification

1 unchanged sentence

other comprehensive income (b)

Net current-period other comprehensive income

Ending Balance at October 28, 2023

Net current-period other comprehensive income (loss)

Ending Balance at May 4, 2024

(a) All amounts are net-of-tax.

Amounts in parentheses indicate a debit/reduction to accumulated other comprehensive income.

Amounts in parentheses indicate a debit/reduction to accumulated other comprehensive

(b) Includes $

impact of Accumulated other comprehensive income reclassifications into Interest and other

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

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

The tax impact of this reclassification was $

reclassification

comprehensive income (in thousands) for the

nine months ended October 28, 2023:

comprehensive income (loss) (in thousands) for

the three months ended April 29,

Changes in Accumulated Other

Comprehensive Income (a)

Comprehensive Income (Loss) (a)

Unrealized Gains

2 unchanged sentences

Beginning Balance at January 28, 2023

Other comprehensive income before

reclassification

Amounts reclassified from accumulated

other comprehensive income (b)

Net current-period other comprehensive income

Ending Balance at October 28, 2023

(a) All amounts are net-of-tax.

Amounts in parentheses indicate a debit/reduction to accumulated other comprehensive income.

(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 $

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 3 – ACCUMULATED OTHER COMPREHENSIVE INCOME

reclassification

comprehensive income (in thousands) for the

three months ended October 29, 2022:

Changes in Accumulated Other

Comprehensive Income (a)

Unrealized Gains

and (Losses) on

Available-for-Sale

Beginning Balance at July 30, 2022

Other comprehensive income before

reclassifications

Amounts reclassified from accumulated

other comprehensive income (b)

Net current-period other comprehensive income

Ending Balance at October 29, 2022

(a) All amounts are net-of-tax.

Amounts in parentheses indicate a debit/reduction to accumulated other comprehensive income.

(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 $

Other comprehensive income (loss) before

reclassification

comprehensive income (in thousands) for the

nine months ended October 29, 2022:

Changes in Accumulated Other

Comprehensive Income (a)

Unrealized Gains

and (Losses) on

Available-for-Sale

Beginning Balance at January 29, 2022

Other comprehensive income before

reclassifications

Amounts reclassified from accumulated

other comprehensive income (b)

Net current-period other comprehensive income

Ending Balance at October 29, 2022

Net current-period other comprehensive income (loss)

Ending Balance at April 29, 2023

(a) All amounts are net-of-tax.

Amounts in parentheses indicate a debit/reduction to accumulated other comprehensive income.

(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 $

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 4 – FINANCING ARRANGEMENTS:

As of October 28, 2023, the Company has an unsecured revolving credit line, which provides for borrowings

million, less

borrowings of

revocable letters

purchase commitments,

committed through

The revolving

credit agreement

contains various

financial covenants

and limitations,

including the

maintenance of

specific financial

amended the revolving

credit agreement

the calculation

Company’s EBITDAR

coverage ratio

covenants and

limitations, including

the maintenance

financial ratios.

minimum EBITDAR

coverage ratio

quarter ended

forward, the Company

was in compliance

with the amended

credit agreement for

receivables included

the calculation of

the quarter ended

compliance without

giving effect

availability,

October 28, 2023.

The weighted average

interest rate under

the credit facility

at October 28,

after giving effect

amendment, the

in compliance

credit agreement.

borrowings outstanding,

availability,

average interest rate under the credit facility was

at May 4, 2024 due to

outstanding borrowings.

NOTE 5 – REPORTABLE SEGMENT INFORMATION:

has determined

operating segments,

, including Cato,

1 unchanged sentence

As outlined in

ASC 280-10, the

ASC 280-10, the Company

reportable segments:

12 unchanged sentences

Merchandise for the Company’s retail operating segments is distributed to retail stores

in a similar manner through

the Company’s single distribution center and is

subsequently sold to customers in

Company operates

specialty retail

customers in a similar manner.

principally in

3 unchanged sentences

card to its customers and

authorizations,

subsidiary of the Company.

all credit authorizations,

payment processing and

collection efforts are

performed by separate

subsidiaries of the Company.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 5 – REPORTABLE SEGMENT INFORMATION

2 unchanged sentences

Three Months Ended

Nine Months Ended

October 28, 2023

Interest and other income

Income (loss) before

Capital expenditures

Income before taxes

Capital expenditures

Three Months Ended

Nine Months Ended

October 29, 2022

Interest and other income

April 29, 2023

Interest and other income

Income (loss) before

Income before

Capital expenditures

Income before taxes

Capital expenditures

Total assets as of October 28, 2023

Total assets as of January 28, 2023

The Company evaluates segment performance based on

income before income taxes.

The Company does not

Total assets as of May 4, 2024

Total assets as of February 3, 2024

allocate certain corporate expenses or

income taxes to the credit segment.

The following schedule summarizes the direct expenses

of the credit segment, which are

reflected in Selling,

The following schedule

summarizes the direct

expenses of the

credit segment which

are reflected in

general and administrative expenses (in

Three Months Ended

Nine Months Ended

April 29, 2023

Other expenses

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 6 – STOCK-BASED COMPENSATION:

As of October 28, 2023,

the Company had

long-term compensation plans pursuant to

which stock-based

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

Effective May 24,

shares for grant were no longer available

under the 2013 Incentive Compensation Plan.

available for grant under each of

the plans as of October 28,

NOTE 6 – SHARE BASED COMPENSATION:

forms of equity-based awards,

including restricted stock

and stock options for

grant to officers, directors

key employees.

available for grant under this plan as

of May 4, 2024:

Options and/or restricted stock initially authorized

Options and/or restricted stock available for grant

October 28, 2023

Compensation–Stock Compensation

amortized to compensation expense on a straight-line basis over the

related vesting periods.

As of October

respectively,

unrecognized compensation expense

related to nonvested

restricted stock awards,

weighted-average

respectively.

respectively,

compensation expense

amortized to compensation expense on a

straight-line basis over the related vesting periods.

respectively,

component of Selling,

general and administrative expenses

in the Condensed

Consolidated Statements of

Income (Loss) and Comprehensive Income (Loss).

average vesting period of

years, respectively.

The total compensation benefit during the

three months ended

compared to an

for the three

compensation activity

administrative expenses in the Condensed Consolidated Statements of Income.

The following summary

2 unchanged sentences

unvested restricted stock

the nine months ended

Weighted Average

the three months ended May

Grant Date Fair

Restricted stock awards at January 28, 2023

Restricted stock awards at February 3, 2024

Forfeited or expired

Restricted stock awards at October 28, 2023

Restricted stock awards at May 4, 2024

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 6 – STOCK BASED-COMPENSATION (CONTINUED):

NOTE 6 – SHARE BASED COMPENSATION (CONTINUED):

semi-annual offering

% discount through

payroll deductions.

During the nine

per share, respectively,

under the Employee

Stock Purchase Plan.

The compensation expense

recognized for

Stock Purchase

through payroll

share, respectively, under

the Employee Stock

Purchase Plan.

compensation expense recognized

approximately

respectively.

classified as a component of Selling,

general and administrative expenses.

Selling, general and administrative expenses in

the Condensed Consolidated Statements of Income.

– FAIR VALUE MEASUREMENTS:

4 unchanged sentences

measured at fair value (in thousands)

as of October 28, 2023 and January

October 28, 2023

as of May 4, 2024 and

February 3, 2024:

State/Municipal Bonds

4 unchanged sentences

Corporate Equities

Commercial Paper

Deferred Compensation

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

January 28, 2023

State/Municipal Bonds

4 unchanged sentences

Corporate Equities

Commercial Paper

Deferred Compensation

5 unchanged sentences

tax-exempt and taxable

governmental debt securities held

in managed accounts with

underlying ratings of A

Treasury Notes

have contractual maturities which range from

available-for-sale

investments, Restricted cash and Other assets on the accompanying Condensed Consolidated Balance Sheets.

unrealized gains

in Accumulated

other comprehensive income.

asset-backed securities are bonds

comprised of auto loans

and bank credit

cards that carry

asset-backed securities

that were originated and serviced by captive auto finance units, banks or finance companies.

The bank credit

card receivables

holders of cards from American Express, Citibank,

JPMorgan Chase, Capital One and Discover.

Additionally,

compensation plan assets

At January 28,

2023, the Company

million of corporate

equities and deferred compensation plan assets of $

All of these assets are recorded within

assets in the Condensed Consolidated Balance

Level 1 securities are measured at fair value using quoted active market prices.

Level 2 investment securities

available on active exchanges for identical

Their fair value is principally based on market

observable market information such as quotes from less active markets and/or quoted prices of securities with

similar characteristics, among other factors.

governmental debt securities held in managed accounts with underlying ratings of A or better at May 4, 2024

and February 3, 2024.

The state, municipal and corporate bonds and asset-backed securities have contractual

Treasury/Agencies

contractual maturities which range from

These securities are classified as

available-for-

Consolidated Balance Sheets.

assets are carried

at fair value

with unrealized gains and

losses reported

Accumulated other

comprehensive income.

The asset-backed

securities are

bonds comprised

of auto loans and

bank credit cards that

carry AAA ratings.

auto loan asset-backed securities

by static pools of auto loans that were originated and serviced

by captive auto finance units, banks or finance

Capital One, and Discover.

Additionally, at May 4, 2024, the Company had $

million of corporate equities and deferred compensation

corporate equities

deferred compensation plan assets

assets are recorded within Other

assets in the

Condensed Consolidated Balance Sheets.

Level 1 category securities are measured

at fair value using quoted active

market prices.

Level 2 investment

management with

the assistance

third-party pricing

active markets

identical assets are

not available, these

prices are determined

by the pricing

service using observable

characteristics, among other factors.

Deferred compensation plan

5 unchanged sentences

such factors as the

fair value of the underlying assets and discounted cash flow and are therefore classified within Level 3

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

fair value of the underlying assets and discounted cash flow and are therefore classified within

Level 3 of the

compensation obligation,

1 unchanged sentence

insurance funds’

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

designed to mirror mutual funds and money

1 unchanged sentence

actively traded.

measured using

inputs for the

ended October

year ended January

2023 (in thousands):

measured using Level 3 inputs as of

May 4, 2024 and February 3,

2024 (dollars in thousands):

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Measurements Using

2 unchanged sentences

Cash Surrender Value

Beginning Balance at January 28, 2023

Beginning Balance at February 3, 2024

Total gains or (losses)

Included in interest and other income (or

changes in net assets)

Included in other comprehensive income

Ending Balance at October 28, 2023

Included in interest and other income (or changes in net assets)

Ending Balance at May 4, 2024

Measurements Using

2 unchanged sentences

Deferred Compensation

Beginning Balance at January 28, 2023

Beginning Balance at February 3, 2024

Total (gains) or losses

Included in interest and other income (or

changes in net assets)

Included in other comprehensive income

Ending Balance at October 28, 2023

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

Included in interest and other income (or changes in net assets)

Ending Balance at May 4, 2024

Measurements Using

4 unchanged sentences

Total gains or (losses)

Included in interest and other income (or

changes in net assets)

Included in other comprehensive income

Ending Balance at January 28, 2023

Included in interest and other income (or changes in net assets)

Ending Balance at February 3, 2024

Measurements Using

4 unchanged sentences

Total (gains) or losses

Included in interest and other income (or

changes in net assets)

Included in other comprehensive income

Ending Balance at January 28, 2023

Included in interest and other income (or changes in net assets)

Ending Balance at February 3, 2024

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 8 – RECENT ACCOUNTING PRONOUNCEMENTS:

The Company has reviewed recent accounting pronouncements and

believe none will have a material

impact on the Company’s financial statements.

Disclosures”,

expenses, other segment items, title

and position of the chief

operating decision maker (“COD”) and how

reported measures

make decisions.

annual disclosure

interim periods.

effective for

retrospectively

prior periods presented in the financial statements.

The Company is currently in the process of evaluating

the potential impact

of adoption of this

new guidance on its

consolidated financial statements and

Disclosures”,

disaggregated

reconciliation

information on

This guidance

years beginning

after December

15, 2024 for all public

business entities, with early adoption and retrospective application

of evaluating

the potential

on its consolidated financial statements and related disclosures.

NOTE 9 – INCOME TAXES:

The Company had an effective tax rate

for the first nine months of 2023

The Company had

an effective tax

first quarter of

% compared to

the first nine months of 2022.

The change in the effective tax

rate for the first nine months was

due to increases in foreign rate differential and the release of reserves for uncertain tax positions,

Intangible Low-taxed

Income (GILTI),

income taxes,

non-deductible

compensation, and foreign tax credits, as percentages on a pre-tax

an effective tax

first quarter of

Income tax expense

for the quarter

decreased to $

decrease in tax

primarily due to

valuation allowances

against net deferred tax assets

attributable to U.S.

operating loss carryforwards and the impact

of the foreign rate differential and lower state income taxes.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – COMMITMENTS AND CONTINGENCIES:

The Company is, from time to time, involved in routine litigation incidental to the conduct of its business,

litigation instituted by persons injured upon premises under the Company’s control, litigation with respect

discrimination

litigation with present or former employees.

litigation instituted

premises under

litigation with

discrimination and

present or former employees.

Although such

10 unchanged sentences

financial statements.

inherent uncertainties

adverse outcome

materially and

adversely affect

financial condition,

operations and

deemed probable and reasonably estimable.

uncertainties

materially and adversely affect the Company’s

financial condition, results of operations and cash flows in

probable and reasonably estimable.

NOTE 11 – REVENUE RECOGNITION:

3 unchanged sentences

transferred to the

are recorded as deferred revenue until they are

redeemed or forfeited.

Layaway sales

are recorded as deferred

revenue until the customer

takes possession of, or

forfeits, the merchandise.

cards do not have

expiration dates.

A provision is

made for estimated merchandise returns

based on sales

revenue until they

or forfeited.

not have expiration dates.

Layaway transactions are recorded as

deferred revenue until the customer takes

possession or

estimated merchandise

returns based

transaction are

4 unchanged sentences

and accrued) are classified as Cost of goods sold.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

own proprietary

to customers.

Company’s wholly-owned

subsidiaries.

of the credit

card receivables are

and nine months ended October 28, 2023, the

Company estimated customer credit losses of $

, respectively,

compared to $

for the three

and nine months

ended October

wholly-owned subsidiaries.

receivables are

estimated customer credit

for the periods

respectively,

Sales purchased

the Company’s

proprietary credit

respectively,

million and $

million for the three and nine months ended October 29, 2022, respectively.

million for the periods ended May 4, 2024 and April 29, 2023, respectively.

customers (in thousands):

Balance as of

October 28, 2023

January 28, 2023

February 3, 2024

Proprietary Credit Card Receivables, net

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 12 – LEASES:

Company determines

arrangement is

stores, offices,

1 unchanged sentence

and equipment.

Its leases have

remaining lease terms

years based on

the estimated likelihood

include options to

extend the lease

, and some include options to terminate the lease

, some of which

include options to extend

the lease term for

up to five years

, and some of

within one year

The Company considers

determining the

establish its

right-of-use assets

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

restrictive covenants.

2 unchanged sentences

Three Months Ended

October 28, 2023

October 29, 2022

Operating lease cost (a)

lease cost (b)

(a) Includes right-of-use asset amortization of ($

) million and ($

) million for the three months ended October 28, 2023 and

October 29, 2022, respectively.

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

Nine Months Ended

October 28, 2023

October 29, 2022

April 29, 2023

Operating lease cost (a)

2 unchanged sentences

) million and ($

) million for the nine months ended October 28, 2023 and

October 29, 2022, respectively.

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

) million for the three months ended

May 4, 2024 and April 29, 2023, respectively.

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

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

NINE MONTHS ENDED OCTOBER 28, 2023 AND

OCTOBER 29, 2022

NOTE 12 – LEASES (CONTINUED):

Supplemental cash flow

6 unchanged sentences

Three Months Ended

October 28, 2023

October 29, 2022

Cash paid for amounts included in the measurement of lease liabilities

Non-cash activity:

Right-of-use assets obtained in exchange for lease obligations

Nine Months Ended

October 28, 2023

October 29, 2022

April 29, 2023

Cash paid for amounts included in the measurement of lease liabilities

Non-cash activity:

Right-of-use assets obtained in exchange for lease obligations

Right-of-use assets obtained in exchange for lease obligations, net of rent violations

Weighted-average

October 28, 2023

October 29, 2022

April 29, 2023

Weighted-average remaining lease term

Weighted-average discount rate

As of May 4, 2024, the maturities of lease liabilities by fiscal year for the Company’s

operating leases are

as follows (in thousands):

Total lease payments

1 unchanged sentence

Present value of lease liabilities

(a) Excluding the nine months ended October 28, 2023

(a) Excluding the 3 months ended May 4, 2024.

THE CATO CORPORATION

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-Q

Item 1. Financial Statements