What changed in this filing

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Item 1. Financial Statements

2025-08-28 compared with 2025-05-29 · 384 added, 197 removed, 467 unchanged (55% of the section changed)

5 unchanged sentences

Three Months Ended

Six Months Ended

August 2, 2025

August 3, 2024

August 2, 2025

August 3, 2024

(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

1 unchanged sentence

Income before income taxes

Income tax expense

Income tax (benefit) expense

Basic earnings per share

1 unchanged sentence

Comprehensive income:

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

of deferred income taxes of $

for each of the three months

ended May 3, 2025 and May 4, 2024

Net unrealized gain (loss) on available-for-sale securities

for each of the three and

six months ended

August 2, 2025 and August 3, 2024, respectively

Comprehensive income

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

August 2, 2025

February 1, 2025

5 unchanged sentences

Accounts receivable, net of allowance for customer credit losses of

at May 3, 2025 and February 1, 2025, respectively

at August 2, 2025 and February 1, 2025, 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 3, 2025 and February 1, 2025, respectively

issued at August 2, 2025 and February 1, 2025, respectively

Convertible Class B common stock, $

1 unchanged sentence

shares authorized;

shares issued at May 3, 2025 and February 1, 2025

issued at August 2, 2025 and February 1, 2025

Additional paid-in capital

7 unchanged sentences

OF CASH FLOWS

Three Months Ended

Six Months Ended

August 2, 2025

August 3, 2024

(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

3 unchanged sentences

(Gain) loss on disposal of property and equipment

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

Changes in operating assets and liabilities which provided

Accounts receivable

10 unchanged sentences

Sales of other assets

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Financing Activities:

2 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, except per share data)

1 unchanged sentence

Comprehensive income:

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

income tax benefit of $

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

deferred income tax benefit of $

Class A common stock sold through employee stock purchase

3 unchanged sentences

Balance — May 3, 2025

Comprehensive income:

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

deferred income tax benefit of $

Share-based compensation expense

Repurchase and retirement of treasury shares

Balance — August 2, 2025

See notes to condensed consolidated financial statements (unaudited).

THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS

OF STOCKHOLDERS’ EQUITY

Comprehensive

Stockholders'

Income (Loss)

(Dollars in thousands, except per share data)

1 unchanged sentence

Comprehensive income:

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

income tax benefit of $

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

deferred income tax benefit of $

Dividends paid ($

4 unchanged sentences

Balance — May 4, 2024

Comprehensive income:

Unrealized net gain 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 expense

Balance — August 3, 2024

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 2, 2025 AND AUGUST 3,

NOTE 1 - GENERAL

The condensed consolidated

financial statements as

the three months

3, 2025 and May 4, 2024 have been prepared from the accounting

records of The Cato Corporation and its

The condensed

consolidated financial

statements as

prepared from

the accounting

Corporation and

its wholly-owned

subsidiaries (the

“Company”), and

management, all

adjustments considered

necessary for

the financial

statements have

been included.

All such adjustments are of a normal, recurring nature unless otherwise noted.

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

for the entire year.

adjustments are

normal, recurring

nature unless

The results of the interim periods

may not be indicative of the results expected for the entire year.

The interim financial

2 unchanged sentences

the consolidated financial statements

of February 1,

2025 have been

derived from the

10 unchanged sentences

Consolidated Statements of Income and Comprehensive Income

for the period ended May 4, 2024.

in the first quarter of fiscal 2024.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

NOTE 2 - EARNINGS PER SHARE:

27 unchanged sentences

outstanding for

Purchase Plan.

Purchase Plan, of which there were

none for the periods presented

Three Months Ended

Six Months Ended

August 2, 2025

August 3, 2024

August 2, 2025

August 3, 2024

(Dollars in thousands, except per share data)

8 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

NOTE 3 – ACCUMULATED OTHER COMPREHENSIVE INCOME:

comprehensive

income (in thousands) for the

three months ended August 2, 2025:

Changes in Accumulated Other

Comprehensive Income (a)

Unrealized Gains

and (Losses) on

Available-for-Sale

Beginning Balance at May 3, 2025

Other comprehensive income before

reclassification

comprehensive income (loss) (in thousands) for

the three months ended May 3,

Amounts reclassified from accumulated

other comprehensive income to net income

Net current-period other comprehensive income

Ending Balance at August 2, 2025

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

comprehensive

income (in thousands) for the

six months ended August 2, 2025:

Changes in Accumulated Other

Comprehensive Income (Loss) (a)

Comprehensive Income (a)

Unrealized Gains

2 unchanged sentences

Beginning Balance at February 1, 2025

Other comprehensive income (loss) before

Other comprehensive income before

reclassification

Amounts reclassified from accumulated

other comprehensive income (b)

Net current-period other comprehensive income (loss)

Ending Balance at May 3, 2025

other comprehensive income to net income (b)

Net current-period other comprehensive income

Ending Balance at August 2, 2025

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

4 unchanged sentences

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 2, 2025 AND AUGUST 3,

NOTE 3 – ACCUMULATED OTHER COMPREHENSIVE INCOME

comprehensive

income (in thousands) for the

three months ended August 3, 2024:

Changes in Accumulated Other

Comprehensive Income (a)

Unrealized Gains

and (Losses) on

Available-for-Sale

Beginning Balance at May 4, 2024

Other comprehensive income before

reclassification

comprehensive income (loss) (in thousands) for

the three months ended May 4,

Amounts 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 $

comprehensive

income (in thousands) for the

six months ended August 3, 2024:

Changes in Accumulated Other

Comprehensive Income (Loss) (a)

Comprehensive Income (a)

Unrealized Gains

2 unchanged sentences

Beginning Balance at February 3, 2024

Other comprehensive income (loss) before

Other comprehensive income before

reclassification

1 unchanged sentence

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 income.

(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 $

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

NOTE 4 – FINANCING ARRANGEMENTS:

On March 13, 2025, the Company,

as borrower, and certain other

domestic subsidiaries, as borrowers and

borrower, and

other domestic

subsidiaries, as

guarantors, entered

3 unchanged sentences

subsidiaries,

facility (the “ABL

Facility”) in an

The proceeds from

the ABL Facility

be used to provide funding for ongoing working capital and general corporate

Credit Agreement

secured primarily

third-party credit

card receivables.

borrowings outstanding

availability under

National Association,

“Lender”), to

asset-based revolving

credit facility

provide funding for ongoing working capital

and general corporate purposes.

The ABL Credit Agreement is committed through

and is secured primarily by inventory and third-

million before

1 unchanged sentence

million outstanding

borrowing availability to

average interest rate

credit facility was

at May 3, 2025 due to

reduced borrowing

availability to $

million as of August 2, 2025.

The weighted average interest rate under the credit facility

at August 2, 2025 due to

outstanding borrowings.

21 unchanged sentences

Company operates

states as of May 3, 2025, principally in the southeastern United States.

The Company offers its own credit

card to its customers and all

credit authorizations, payment processing and

allocate certain corporate expenses to

the Credit segment.

information for decision-making purposes, including the allocation of resources.

The Company also provides

corporate services,

including finance,

information technology,

states as of August 2, 2025, principally in the southeastern United States.

The Company offers its own credit card to its

customers and all credit authorizations, payment processing

and collection

a wholly-owned

subsidiary of

not allocate certain corporate expenses to the Credit segment.

The Company’s

President and

Chief Executive Officer

Company’s chief

operating decision

structure described

above reflects

CODM regularly

decision-making

provides corporate

services, including

finance, information

and corporate

administration, to

which are fully allocated to the retail

Interest and other income from

assets held for investment and

sale are not included in assessing

the segments’ performance and therefore not

allocated to either segment.

The CODM manages

and evaluates the

segments’ operating performance

based on segment

sales, expenses,

budget-to-actual

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

primarily include

selling, general

and administrative expenses,

determined to

assets are not presented in

the tables below.

financial statements

Company’s Annual

Report on Form 10-K for the fiscal year ended February 1, 2025.

The Company evaluates performance based

on profit or loss from

operations before income taxes.

its segments which are fully allocated to the retail segment.

Interest and other income from assets held for

investment and

the segments’

performance and

therefore not

to either segment.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – REPORTABLE SEGMENT INFORMATION

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

expenses, and

operations before

budget and forecasting process,

monthly analyses of budget-to-actual

and prior year

administrative

balances and, therefore, total segment assets are not presented in the

tables below.

The accounting

those described

Accounting Policies in Note 1 of the consolidated financial statements included in the Company’s Annual

performance based on segment income before income taxes.

The following schedule summarizes certain segment

1 unchanged sentence

Three Months Ended

August 2, 2025

Cost of goods sold

2 unchanged sentences

Interest and other income

Income (loss) before income taxes

Segment income before income taxes

Corporate interest and other income

Income (loss) before income taxes

Income before income taxes

Capital expenditures

Six Months Ended

August 2, 2025

Cost of goods sold

Selling, general, and administrative (a)

Corporate overhead

Interest and other income

Segment income before income taxes

Corporate interest and other income

Income before income taxes

Capital expenditures

(a) Selling, general, and administrative expense

include corporate and store payroll, related payroll

benefits, insurance, supplies, advertising, bank and credit

card processing fees.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

NOTE 5 – REPORTABLE SEGMENT INFORMATION

Three Months Ended

August 3, 2024

Cost of goods sold

2 unchanged sentences

Interest and other income

Income (loss) before income taxes

Segment income (loss) before income taxes

Corporate interest and other income

Income (loss) before income taxes

Income before income taxes

Capital expenditures

Six Months Ended

August 3, 2024

Cost of goods sold

Selling, general, and administrative (a)

Corporate overhead

Interest and other income

Segment income before income taxes

Corporate interest and other income

Income before income taxes

Capital expenditures

(a) Selling, general, and administrative expense

include corporate and store payroll, related

payroll taxes and benefits, insurance, supplies, advertising,

bank and credit card

processing fees.

include corporate and store payroll, related payroll

benefits, insurance, supplies, advertising, bank and credit

card processing fees.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – SHARE-BASED COMPENSATION:

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

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 3, 2025:

of August 2, 2025:

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

average vesting period of

years for both periods.

The total compensation expense during the three and

respectively,

expense during

the three months ended May 3, 2025 was $

compared to a benefit of $

for the three months

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

2 unchanged sentences

Forfeited or expired

Restricted stock awards at May 3, 2025

Restricted stock awards at August 2, 2025

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – SHARE-BASED COMPENSATION (CONTINUED):

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

NOTE 6 – STOCK BASED-COMPENSATION (CONTINUED):

semi-annual offering

% discount through payroll deductions.

three months ended May 3, 2025

and May 4, 2024, the

shares to employees

average discount of

respectively, under

% discount through payroll

During the six

months ended August 2,

2025 and August 3,

share, respectively, under

the Employee Stock

Purchase Plan.

compensation expense recognized

Stock Purchase

compensation expense

recognized for

approximately

respectively.

administrative

These 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 May 3, 2025 and

as of August 2, 2025 and

February 1, 2025:

August 2, 2025

State/Municipal Bonds

2 unchanged sentences

Cash Surrender Value of Life Insurance

Asset-backed Securities (ABS)

Commercial Paper

Deferred Compensation

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

– FAIR VALUE MEASUREMENTS

February 1, 2025

State/Municipal Bonds

5 unchanged sentences

Total Liabilities

debt securities held in managed accounts

with underlying ratings of A

or better at May 3, 2025

and corporate

asset-backed securities

Treasury/Agencies

maturities which range from

contractual maturity of up to

Additionally,

deferred compensation

recorded within Other assets in the Condensed

Consolidated Balance Sheets.

available on active exchanges for identical

Their fair value is principally based on market

determined by management with the assistance

of a third-party pricing service.

Since quoted prices in active

Level 2 investment

securities include

corporate, state

and municipal

exchanges for

identical instruments.

principally based

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

Since quoted prices in

active markets

for identical assets

available, these prices

are determined

pricing service using

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

5 unchanged sentences

policies are valued

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

on such factors as the

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

such factors as the

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

6 unchanged sentences

actively traded.

measured using Level 3 inputs for the

three months ended May 3, 2025

and the year ended February 1,

(dollars in thousands):

measured using Level 3 inputs for the six months ended August 2, 2025 and the

year ended February 1, 2025

(in thousands):

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

– FAIR VALUE MEASUREMENTS

5 unchanged sentences

Total gains or (losses):

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

Ending Balance at May 3, 2025

Included in interest and other income (or

changes in net assets)

Ending Balance at August 2, 2025

Measurements Using

4 unchanged sentences

Total (gains) or losses:

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

Ending Balance at May 3, 2025

Included in interest and other income (or

changes in net assets)

Ending Balance at August 2, 2025

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 1, 2025

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 1, 2025

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

NOTE 8 – RECENT ACCOUNTING PRONOUNCEMENTS:

Disclosures,”

In December 2023,

issued ASU 2023-09,

disaggregated

reconciliation

information about

reconciliation as

information on

2 unchanged sentences

after December

15, 2024 for all public

business entities, with early adoption and

business entities, with

early adoption and

retrospective application permitted.

of evaluating

the potential

on its consolidated financial statements and related disclosures.

The Company is

financial statements and related disclosures.

The required disclosures will be included in our 2025 Annual

Report on Form 10-K.

Statement—Reporting

9 unchanged sentences

NOTE 9 – INCOME TAXES:

The Company had an effective tax rate for the

first quarter of 2025 of

% compared to an effective tax

% for the first

quarter of 2024.

Income tax expense for the

quarter increased to $

million in 2024.

The increase in tax expense was primarily due to increases in foreign and

state income taxes.

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company had

an effective tax

first six months

% compared to

million in fiscal

income tax expense

million in fiscal

primarily due

reductions in

foreign income

adjustment to the federal net operating loss carryback claim as

a result of the Coronavirus Aid, Relief and

Economic Security Act (CARES Act), partially offset by an increase in state income

2025, the One Big

Beautiful Bill Act

(the “OBBBA”) was

signed into law.

The Company has

considered the impact

quarter of fiscal

2025 and concluded

not have a material impact on the Company’s effective tax rate.

NOTE 10 – COMMITMENTS AND CONTINGENCIES:

17 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

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

materially and

adversely affect

financial condition,

operations and

deemed probable and reasonably estimable.

NOTE 11 – REVENUE RECOGNITION:

19 unchanged sentences

to customers.

wholly-owned subsidiaries.

receivables are

estimated customer credit losses of $

for the periods ended May 3, 2025 and May 4,

subsidiaries.

estimated customer credit losses

for the three

and six months

ended August 2,

respectively,

on sales purchased

by the Company’s

proprietary credit card of

respectively.

respectively,

million and $

million for the periods ended May 3, 2025 and May 4, 2024, respectively.

million for the three and six months ended August 3, 2024, respectively.

customers (in thousands):

Balance as of

August 2, 2025

February 1, 2025

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

NOTE 12 – LEASES:

Company determines

arrangement is

warehouse space

6 unchanged sentences

within one year

Company considers

establish its

5 unchanged sentences

Three Months Ended

August 2, 2025

August 3, 2024

Operating lease cost

lease cost (a)

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

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

Six Months Ended

August 2, 2025

August 3, 2024

Operating lease cost

lease cost (a)

(a) Primarily related 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 SIX MONTHS ENDED

AUGUST 2, 2025 AND AUGUST 3,

NOTE 12 – LEASES (CONTINUED:

7 unchanged sentences

Three Months Ended

August 2, 2025

August 3, 2024

Cash paid for amounts included in the measurement of lease liabilities

1 unchanged sentence

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

Six Months Ended

August 2, 2025

August 3, 2024

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

Weighted-average

August 2, 2025

August 3, 2024

Weighted-average remaining lease term

Weighted-average discount rate

As of May 3, 2025, the maturities of lease liabilities by fiscal year for the Company’s

operating leases are

as follows (in thousands):

As of August 2,

2025, 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 3, 2025.

(a) Excluding the six months ended August 2, 2025

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