What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-29 compared with 2024-05-30 · 356 added, 213 removed, 453 unchanged (56% of the section changed)

5 unchanged sentences

Three Months Ended

April 29, 2023

Six Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

(Dollars in thousands, except per share data)

3 unchanged sentences

COSTS AND EXPENSES, NET

Cost of goods sold (exclusive of depreciation shown below)

Selling, general and administrative (exclusive of depreciation

Cost of goods sold (exclusive of depreciation shown

Selling, general and administrative (exclusive of

Interest and other income

5 unchanged sentences

Comprehensive income:

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,

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

deferred income taxes of $

the three and six months ended July 29, 2023, respectively

Comprehensive income

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

August 3, 2024

February 3, 2024

5 unchanged sentences

Accounts receivable, net of allowance for customer credit losses of

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

at August 3, 2024 and February 3, 2024, respectively

Merchandise inventories

7 unchanged sentences

Accrued expenses

Accrued bonus and benefits

Accrued employee benefits and bonus

Accrued income taxes

9 unchanged sentences

shares authorized;

shares issued

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

issued at August 3, 2024 and February 3, 2024, respectively

Convertible Class B common stock, $

1 unchanged sentence

shares authorized;

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

shares issued at August 3, 2024 and February 3, 2024

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Total Stockholders' Equity

4 unchanged sentences

OF CASH FLOWS

Three Months Ended

April 29, 2023

Six Months Ended

August 3, 2024

July 29, 2023

(Dollars in thousands)

Operating Activities:

Adjustments to reconcile net income 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

Purchase premium and discount accretion of investments

Gain on sale of assets held for investment

1 unchanged sentence

Deferred income taxes

Loss (Gain) on disposal of property and equipment

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

Loss on disposal of property and equipment

Changes in operating assets and liabilities which provided

Accounts receivable

15 unchanged sentences

Proceeds from employee stock purchase plan

Net cash used by financing activities

Net cash used in financing activities

Net increase in cash, cash equivalents, and restricted cash

9 unchanged sentences

Stockholders'

Income (Loss)

(Dollars in thousands)

1 unchanged sentence

Comprehensive income:

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

income tax benefit of $0

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

deferred income tax expense of $0

Dividends paid ($

4 unchanged sentences

Balance — May 4, 2024

Comprehensive income:

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

deferred income tax expense of $0

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 — August 3, 2024

See notes to condensed consolidated financial statements (unaudited).

THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS

OF STOCKHOLDERS’ EQUITY

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 expense of $

Unrealized net gains 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 29, 2023

See notes to condensed consolidated financial statements (unaudited).

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 1 - GENERAL

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

twenty-six-week

periods ended August

2023 have been

prepared from the

accounting records of

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

financial statements

normal, recurring

nature unless

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

for the entire year.

otherwise noted.

interim period

be indicative

results expected

The interim financial

9 unchanged sentences

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

for the period ended August 3, 2024.

Subsequent to

insurance claim settlement and sale of its corporate jet.

On August 29, 2024, the Board of Directors maintained the quarterly dividend

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 2 - EARNINGS PER SHARE:

29 unchanged sentences

Three Months Ended

April 29, 2023

Six Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

(Dollars in thousands)

Earnings allocated to non-vested equity awards

Earnings (loss) allocated to non-vested equity awards

Net earnings available to common stockholders

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 3 – ACCUMULATED OTHER COMPREHENSIVE INCOME:

reclassification

comprehensive income (loss) (in thousands) for

the three months ended May 4,

comprehensive income (in thousands) for the

three months ended August 3, 2024:

Changes in Accumulated Other

Comprehensive Income (Loss) (a)

Comprehensive Income (a)

Unrealized Gains

1 unchanged sentence

Available-for-Sale

Beginning Balance at May 4, 2024

Other comprehensive income before

reclassification

Gains reclassified from accumulated

other comprehensive income (b)

Net current-period other comprehensive income

Ending Balance at August 3, 2024

(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 realized gains on available-for-sale securities.

The tax impact of this reclassification was $

reclassification

comprehensive income (in thousands) for the

six months ended August 3, 2024:

Changes in Accumulated Other

Comprehensive Income (a)

Unrealized Gains

and (Losses) on

Available-for-Sale

Beginning Balance at February 3, 2024

Other comprehensive income (loss) before

Other comprehensive income before

reclassification

Amounts reclassified from accumulated

Gains reclassified from accumulated

other comprehensive income (b)

Net current-period other comprehensive income (loss)

Ending Balance at May 4, 2024

Net current-period other comprehensive loss

Ending Balance at August 3, 2024

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

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

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

impact of Accumulated other comprehensive income reclassifications into Interest and other

income for net realized 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

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 3 – ACCUMULATED OTHER COMPREHENSIVE INCOME

reclassification

comprehensive income (in thousands) for the

three months ended July 29, 2023:

Changes in Accumulated Other

Comprehensive Income (a)

Unrealized Gains

and (Losses) on

Available-for-Sale

Beginning Balance at April 29, 2023

Other comprehensive income before

reclassifications

Gains reclassified from accumulated

other comprehensive income (b)

Net current-period other comprehensive income

Ending Balance at July 29, 2023

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

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

(b) Includes $

3 unchanged sentences

reclassification

comprehensive income (loss) (in thousands) for

the three months ended April 29,

comprehensive income (in thousands) for the

six months ended July 29, 2023:

Changes in Accumulated Other

Comprehensive Income (Loss) (a)

Comprehensive Income (a)

Unrealized Gains

2 unchanged sentences

Beginning Balance at January 28, 2023

Other comprehensive income (loss) before

reclassification

Net current-period other comprehensive income (loss)

Ending Balance at April 29, 2023

Other comprehensive income before

reclassifications

Gains reclassified from accumulated

other comprehensive income (b)

Net current-period other comprehensive income

Ending Balance at July 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 realized 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

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 4 – FINANCING ARRANGEMENTS:

borrowings of

revocable letters

covenants and

limitations, including

the maintenance

financial ratios.

minimum EBITDAR

coverage ratio

receivables included

the calculation of

the quarter ended

after giving effect

Company amended the

revolving credit agreement to

modify a definition used

in calculating the

minimum EBITDAR coverage ratio to add back certain income tax receivables included in the calculation of

quarter ended

giving effect

amendment, the

in compliance

compliance with the

credit agreement.

borrowings outstanding,

availability,

average interest rate under the credit facility was

at May 4, 2024 due to

r any outstanding

credit that reduced borrowing availability, as of August 3, 2024.

The weighted average interest rate under the

credit facility was

at August 3, 2024 due to

outstanding borrowings.

18 unchanged sentences

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

customers in a similar manner.

principally in

the southeastern

United States.

The Company offers its own credit

card to its customers and

all credit authorizations,

payment processing and

collection efforts are

performed by separate

subsidiaries of the Company.

in a similar manner through

the Company’s single distribution center and is

subsequently sold to customers in

principally in the southeastern United States.

The Company offers its own credit card to its customers and

authorizations,

owned subsidiaries of the Company.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 5 – REPORTABLE SEGMENT INFORMATION

2 unchanged sentences

Three Months Ended

Six Months Ended

August 3, 2024

Interest and other income

Income before taxes

Interest and other income

Income before

Capital expenditures

Three Months Ended

April 29, 2023

Six Months Ended

July 29, 2023

Interest and other income

Income before taxes

Interest and other income

Income before

Capital expenditures

Total assets as of May 4, 2024

Capital expenditures

Total assets as of August 3, 2024

Total assets as of February 3, 2024

The Company evaluates segment performance based on

income before income taxes.

The Company does not

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

The following schedule summarizes the direct expenses

of the credit segment, which are

reflected in Selling,

general and administrative expenses (in

Three Months Ended

April 29, 2023

Six Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Other expenses

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – SHARE BASED COMPENSATION:

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 6 – STOCK-BASED COMPENSATION:

Company’s 2018 Incentive

Compensation Plan allows

for the granting

forms of equity-based awards,

4 unchanged sentences

available for grant under this plan as

of May 4, 2024:

of August 3, 2024:

Options and/or restricted stock initially authorized

1 unchanged sentence

Compensation–Stock Compensation

amortized to compensation expense on a

straight-line basis over the related vesting periods.

amortized to compensation expense on a straight-line basis

over the related vesting periods.

, respectively,

average vesting period of

years, respectively.

The total compensation benefit during the

three months ended

compared to an

for the three

compensation activity

average vesting

respectively.

compensation expense

the three and

six months ended

August 3, 2024

, respectively,

compared to a

respectively.

administrative expenses in the Condensed Consolidated Statements of Income

3 unchanged sentences

unvested restricted stock

the three months ended May

the six months ended

Weighted Average

Grant Date Fair

1 unchanged sentence

Forfeited or expired

Restricted stock awards at May 4, 2024

Restricted stock awards at August 3, 2024

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – SHARE BASED COMPENSATION (CONTINUED):

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 6 – STOCK BASED-COMPENSATION (CONTINUED):

semi-annual offering

4 unchanged sentences

compensation expense recognized

approximately

Selling, general and administrative expenses in

the Condensed Consolidated Statements of Income.

% discount given under the Employee Stock

Purchase Plan was approximately $

for each of the six

months ended August 3, 2024 and

July 29, 2023.

This compensation expense is

classified as a component of

Selling, general and administrative expenses.

– FAIR VALUE MEASUREMENTS:

4 unchanged sentences

measured at fair value (in thousands)

as of May 4, 2024 and

as of August 3, 2024 and

February 3, 2024:

August 3, 2024

State/Municipal Bonds

3 unchanged sentences

Asset-backed Securities (ABS)

Corporate Equities

Deferred Compensation

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

February 3, 2024

State/Municipal Bonds

11 unchanged sentences

tax-exempt and taxable

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

governmental debt

securities held

accounts with

underlying ratings

contractual maturities which range from

These securities are classified as

available-for-

Treasury/Agencies Notes and

available-for-sale and are

Short-term investments

the respective

Consolidated Balance Sheets.

5 unchanged sentences

comprehensive income.

The asset-backed

securities are

bonds comprised

The asset-backed securities

of auto loans and

5 unchanged sentences

Capital One, and Discover.

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

million of corporate equities and deferred compensation

deferred compensation

During the six months ended August

3, 2024, the Company sold its

corporate equities.

deferred compensation plan assets

assets are recorded within Other

assets in the

Condensed Consolidated Balance Sheets.

assets are recorded within Other assets

in the Condensed Consolidated Balance Sheets.

Level 1 category securities are measured

2 unchanged sentences

Level 2 investment

management with

the assistance

third-party pricing

active markets

active exchanges for identical instruments.

Their fair value is principally based on market values determined

by management with the assistance of a third-party pricing service.

Since quoted prices in active markets for

identical assets are

11 unchanged sentences

such factors as the

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

Level 3 of 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

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

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 Level 3 inputs as of

May 4, 2024 and February 3,

2024 (dollars in thousands):

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

measured using Level 3 inputs for the six months ended August 3, 2024 and the year ended February 3,

(in thousands):

Measurements Using

4 unchanged sentences

Total gains or (losses):

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

Ending Balance at May 4, 2024

Included in interest and other income (or

changes in net assets)

Ending Balance at August 3, 2024

Measurements Using

4 unchanged sentences

Total (gains) or losses:

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

Ending Balance at May 4, 2024

Included in interest and other income (or

changes in net assets)

Ending Balance at August 3, 2024

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

Measurements Using

4 unchanged sentences

Total gains or (losses):

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

Included in interest and other income (or

changes in net assets)

Ending Balance at February 3, 2024

5 unchanged sentences

Total (gains) or losses:

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

Included in interest and other income (or

changes in net assets)

Ending Balance at February 3, 2024

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 8 – RECENT ACCOUNTING PRONOUNCEMENTS:

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

retrospectively to all prior periods presented

in the financial statements.

The Company is currently in the

evaluating the

potential impact

consolidated financial

statements and related disclosures.

Disclosures,”

12 unchanged sentences

The Company had

an effective tax

first quarter of

the first six

months of 2024

% compared to

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

fiscal 2024 from $

million in fiscal 2023.

The decrease in tax expense is primarily due to the valuation

allowance against net

deferred tax assets attributable

net operating loss carryforwards

the impact of the foreign rate differential and lower state income taxes.

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

premises under

litigation with

discrimination and

present or former employees.

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

discrimination

litigation with present or former employees.

Although such

10 unchanged sentences

financial statements.

uncertainties

materially and adversely affect the Company’s

financial condition, results of operations and cash flows in

probable and reasonably estimable.

inherent uncertainties

adverse outcome

materially and

adversely affect

financial condition,

operations and

deemed probable and reasonably estimable.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 11 – REVENUE RECOGNITION:

19 unchanged sentences

to customers.

wholly-owned subsidiaries.

receivables are

estimated customer credit

for the periods

Company’s wholly-owned

subsidiaries.

of the credit

card receivables are

Company estimated

, respectively,

the Company’s

proprietary credit

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

ended July 29,

respectively.

respectively,

million and $

million for the three and six months ended July 29, 2023, respectively.

customers (in thousands):

Balance as of

August 3, 2024

February 3, 2024

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

NOTE 12 – LEASES:

Company determines

arrangement is

stores, offices,

warehouse space

and equipment.

warehouse space and

Its leases have

remaining lease terms

, some of which

include options to extend

the lease term for

up to five years

, and some of

years based on

the estimated likelihood

include options to

extend the lease

, and some include options to terminate the lease

within one year

establish its

right-of-use assets

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

The Company considers

determining the

restrictive covenants.

2 unchanged sentences

Three Months Ended

April 29, 2023

August 3, 2024

July 29, 2023

Operating lease cost (a)

2 unchanged sentences

) million and ($

) 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.

) million for the three months ended August 3, 2024 and July

29, 2023, respectively.

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

Six Months Ended

August 3, 2024

July 29, 2023

Operating lease cost (a)

lease cost (b)

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

) million and ($

) million for the six months ended August 3, 2024 and July 29,

2023, respectively.

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

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – LEASES (CONTINUED):

FOR THE THREE MONTHS AND

SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023

Supplemental cash flow

6 unchanged sentences

Three Months Ended

April 29, 2023

August 3, 2024

July 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, net of rent violations

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

Six Months Ended

August 3, 2024

July 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

Weighted-average

April 29, 2023

August 3, 2024

July 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 3 months ended May 4, 2024.

(a) Excluding the six months ended August 3, 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