What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-25 compared with 2025-03-31 · 437 added, 568 removed, 1150 unchanged (47% of the section changed)

5 unchanged sentences

for the fiscal

years ended February 1, 2025, February 3, 2024 and January 28, 2023 ................................

Consolidated Balance Sheets at February 1, 2025 and February 3, 2024

years ended January 31, 2026, February 1, 2025 and February 3, 2024 ................................

Consolidated Balance Sheets at January 31, 2026 and February 1, 2025

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

Consolidated Statements of Cash Flows for the fiscal years ended February 1, 2025,

Consolidated Statements of Cash Flows for the fiscal years ended January 31, 2026,

February 1, 2025

and January 28, 2023................................

and February 3, 2024 ................................

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

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

Consolidated Statements of Stockholders’ Equity for the fiscal years ended February 1,

February 3, 2024 and January 28, 2023 ................................................................

Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 31,

February 1, 2025 and February 3, 2024 ................................................................

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

1 unchanged sentence

Schedule II — Valuation

and Qualifying Accounts for the fiscal years ended February 1, 2025,

February 3, 2024 and January 28, 2023 ................................................................

and Qualifying Accounts for the fiscal years ended January 31, 2026,

February 1, 2025 and February 3, 2024 ................................................................

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

3 unchanged sentences

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

subsidiaries (the "Company") as of February 1, 2025 and February 3, 2024,

subsidiaries (the "Company") as of January 31, 2026 and February 1, 2025,

and the related consolidated

1 unchanged sentence

equity and of cash flows

for each of the three years in the period ended February 1, 2025, including

for each of the three years in the period ended January 31, 2026, including

the related notes and financial

3 unchanged sentences

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

February 1, 2025, based on criteria established in

Internal Control - Integrated Framework

(2013) issued

January 31, 2026, based on criteria established in Internal Control - Integrated

Framework (2013) issued

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

1 unchanged sentence

present fairly, in all material

respects, the financial position of the Company as of February

respects, the financial position of the Company as of January 31, 2026

and February 1, 2025, and the

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

in the period ended February 1, 2025

in the period ended January 31, 2026

in conformity with accounting principles generally accepted in the United

2 unchanged sentences

over financial

reporting as of February 1, 2025, based on criteria established

Internal Control - Integrated Framework

reporting as of January 31, 2026, based on criteria established in Internal

Control - Integrated Framework

(2013) issued by the COSO.

13 unchanged sentences

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.

8 unchanged sentences

procedures to assess the risks of

material misstatement of the consolidated financial statements, whether

due to error or fraud, and

material misstatement of the consolidated financial statements, whether due

to error or fraud, and

performing procedures that respond to those risks.

8 unchanged sentences

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

1 unchanged sentence

operating effectiveness of internal control based on the assessed risk.

also included performing

Our audits also

included performing

such other procedures as we considered necessary in the circumstances.

37 unchanged sentences

be communicated to the audit

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

the consolidated financial

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

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

the consolidated

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

7 unchanged sentences

locations were a portion, and

consolidated operating lease right-of-use assets, net balance was $148.9

million as of February 1, 2025.

consolidated operating lease right-of-use assets, net balance was $153.9 million

as of January 31, 2026.

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

7 unchanged sentences

information technology equipment and software.

An impairment

charge is recorded for the amount by

An impairment charge is recorded

for the amount by

which the carrying value exceeds the estimated fair value when management

5 unchanged sentences

assesses the fair value

of each lease by considering market rents and any lease terms

that may adjust market rents under certain

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

2 unchanged sentences

the year ended

February 1, 2025.

January 31, 2026.

The principal considerations for our determination that performing

procedures relating to impairment of

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

matter are (i) the significant judgment

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

29 unchanged sentences

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

(Dollars in thousands, except per share data)

10 unchanged sentences

Costs and expenses, net

Income (loss) before income taxes

Income tax expense

Net income (loss)

Loss before income taxes

Income tax (benefit) expense

Basic earnings (loss) per share

1 unchanged sentence

Dividends per share

Comprehensive income:

Net income (loss)

Unrealized gain (loss) on available-for-sale

securities, net of deferred income taxes of

) for fiscal 2024, 2023

Comprehensive income (loss):

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

securities for fiscal years 2025, 2024,

and 2023, respectively

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

February 1, 2025

January 31, 2026

February 1, 2025

(Dollars in thousands)

(Dollars in thousands, except share and per share data)

Current Assets:

3 unchanged sentences

Accounts receivable, net of allowance for customer credit losses of $

February 1, 2025 and $

January 31, 2026 and $

at February 1, 2025

22 unchanged sentences

shares issued at

February 1, 2025 and February 3, 2024, respectively

January 31, 2026 and February 1, 2025, respectively

Convertible Class B common stock, $

2 unchanged sentences

shares issued at

February 1, 2025 and February 3, 2024

January 31, 2026 and February 1, 2025

Additional paid-in capital

8 unchanged sentences

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

(Dollars in thousands)

Operating Activities:

Net income (loss)

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

Adjustments to reconcile net loss to net cash (used in) provided

by operating activities:

4 unchanged sentences

Deferred income taxes

Loss on disposal of property and equipment

(Gain) loss on disposal of property and equipment

Impairment of assets

12 unchanged sentences

Sales of other assets

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Financing Activities:

9 unchanged sentences

Accrued treasury stock

Life insurance receivable

See notes to consolidated financial statements.

7 unchanged sentences

Comprehensive income:

Unrealized loss 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

Repurchase and retirement of treasury shares

Balance — January 28, 2023

Comprehensive income:

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

7 unchanged sentences

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

deferred income tax benefit of $

deferred income tax of $

Dividends paid ($

3 unchanged sentences

Balance — February 1, 2025

Comprehensive income:

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

deferred income tax of $

Class A common stock sold through employee stock purchase

Share-based compensation expense

Repurchase and retirement of treasury shares

Balance — January 31, 2026

See notes to consolidated financial statements.

9 unchanged sentences

and transactions have been eliminated.

apparel specialty

fashion specialty

stores operate

4 unchanged sentences

and “Cache,” including e-commerce websites.

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

Fiscal year 2024 is

-week year, 2023 is a

-week year and 2022 is a

Company’s fiscal

Saturday nearest January

the subsequent

-week years and 2023 is a

generally accepted

management to

Significant accounting

estimates reflected

financial statements

compensation,

uncertain tax positions and valuation allowances on deferred tax

allowance for customer credit losses, and inventory shrinkage.

original maturities of three months or less.

11 unchanged sentences

of investments

Comprehensive

accompanying Consolidated

Statements of

Income (Loss)

and Comprehensive

Income (Loss).

securities is

amortization of

and accretion of discounts to maturity.

The amortization of premiums, accretion of discounts

gains and losses are included in Interest and other income.

2 unchanged sentences

million and $

million in escrow at February 1, 2025 and

million in escrow at January 31, 2026 and

February 1, 2025, respectively, as security and collateral for administration of the Company’s

3 unchanged sentences

received, for

2025, February

and a refund of $

, respectively.

weighted-average cost method.

years ended January 31, 2026, February 1, 2025, and February

3, 2024 are detailed in the table below:

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

January 31, 2026

February 1, 2025

February 3, 2024

(Dollars in thousands)

Federal taxes

North Carolina

South Carolina

Foreign taxes

income taxes paid

weighted-average cost method.

Property and Equipment:

35 unchanged sentences

fair value when

sufficient to recover the

carrying value.

This determination is

based on a number of

factors, including the

The Company assesses the fair

value of each lease by

considering market rents and any lease

determining when

Company considers real

estate development

perceived local

market conditions,

impairment charges

were incurred in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

Company determines

that undiscounted

projected cash

flows associated

with those long-lived

determination

contribution margin projections.

The Company assesses the fair value of each lease by considering market

conditions, such

anchor tenant

shopping center not

meeting certain

in determining

were incurred in

fiscal 2025, fiscal

2024 and fiscal

respectively.

Other Assets:

Other assets are comprised

of long-term assets, primarily

insurance contracts related to

of long-term assets,

primarily insurance contracts related to

deferred compensation assets and land held for investment purposes.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Balance as of

February 1, 2025

January 31, 2026

February 1, 2025

3 unchanged sentences

Miscellaneous Investments

Asset Held for Sale

Other Deposits

2 unchanged sentences

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

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

the Company begins amortization

initial possession date which

is when the Company

the Company begins amortization as of the

initial possession date, which is when the

Company enters the

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

recorded when

expiration dates.

6 unchanged sentences

from historical amounts.

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

made with the

A provision is made for estimated write-offs associated with

sales made with the

Company’s proprietary credit card.

16 unchanged sentences

breakage percentage

redeemed gift cards.

historical redeemed gift cards.

See Note 2 for further information on miscellaneous

2 unchanged sentences

subsidiaries.

2024, respectively,

the Company’s

January 31, 2026 and February 1, 2025,

respectively, on sales purchased using the Company’s

February 1, 2025, respectively.

2 unchanged sentences

customers (in thousands):

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Balance as of

February 1, 2025

January 31, 2026

February 1, 2025

15 unchanged sentences

of Cost of goods sold.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

expense was approximately $

for the fiscal years ended February 1,

2025, February 3, 2024 and January 28, 2023, respectively.

for the fiscal years ended January 31,

2026, February 1, 2025 and February 3, 2024, respectively.

Stock Repurchase Program:

For the fiscal year ended

February 1, 2025, the Company had

For the fiscal year ended January

31, 2026, the Company had

authorizations.

earnings, net

December 23, 2024.

repurchase program.

Share repurchases are recorded in Retained

earnings, net of par value.

Earnings (Loss) Per

requires dual

presentation of basic

and diluted EPS on

the face of all

income statements for all

entities with complex capital

accompanying Consolidated Statements of

Income (Loss) and

Comprehensive Income (Loss).

Income (Loss) and Comprehensive

Income (Loss).

Company’s certificate

19 unchanged sentences

Employee Stock Purchase Plan.

The following table reflects

the basic and

diluted EPS calculations for

the fiscal years ended

1, 2025, February 3, 2024 and January 28, 2023:

The following

table reflects

EPS calculations

ended January

31, 2026, February 1, 2025 and February 3, 2024:

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

(Dollars in thousands)

7 unchanged sentences

Diluted earnings (loss) per share

respectively,

antidilutive.

purchase discounts and markdown and

4 unchanged sentences

The Company does not receive cooperative advertising allowances.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Company’s assets and liabilities.

2 unchanged sentences

positions are

established in

when, despite

positions are

supportable, the

Company believes

these positions may be

challenged and the

results are uncertain.

Company believes these positions may be challenged and

the results are uncertain.

The Company adjusts

these liabilities in

circumstances.

The Company assesses the

likelihood that deferred tax

assets will be

realized, and based

that assessment, the Company will determine if a valuation allowance should

Act implemented

global intangible

The Company has

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

for income taxes.

unrecognized tax

within operations

recognized as

Income before

income taxes.

Cuts and Jobs

Act implemented a

new minimum tax

on global intangible

low-taxed income

The Company has elected to account for GILTI

tax in the period in which it is incurred, which

is included as a component of its current year provision for income taxes.

Company assesses

11 unchanged sentences

selection costs are capitalized to new, relocated and remodeled stores.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

The Company is self-insured with respect to employee health care, workers’ compensation

28 unchanged sentences

estimated forfeitures.

subsidiaries,

Agreement”) and

documents, by

subsidiaries,

establish an asset-based revolving credit facility (the “ABL Facility”) in an amount up to $

proceeds from the ABL

Facility may be used to

provide funding for ongoing working capital

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

corporate purposes.

The ABL Credit Agreement replaces

the credit agreement, dated as of

May 19, 2022,

time, between

certain domestic

subsidiaries of

principal or accrued interest was outstanding under

the credit facility under the Prior

Credit Agreement at

the time of its termination on March 13, 2025.

The ABL Facility may be

used for revolving credit

loans and letters of

credit from time to

a maximum principal amount of $

million, less an amount equal to the greater of (a)

% of the lesser

of the borrowing base described below and $

million and (b) $

million, subject to the other limitations

described below.

The ABL Facility includes a $

million uncommitted accordion feature that permits the

principal amount

sub-facility that

Facility at closing of the ABL Credit Agreement was $

eligible credit card receivables and inventory, reduced by specified reserves, as follows:

% of eligible credit card receivable, plus

% of net recovery percentage of eligible inventory multiplied by most recent appraised value of

calculated at

first-in first-out

market value (net of intercompany profits and certain other adjustments), minus

applicable reserves (as defined in the ABL Credit Agreement).

permits borrowings

rate (calculated

federal funds rate plus

, (ii) the SOFR rate

described below for an interest period of

one month, plus

rate of interest

announced, from time to

Lender’s “prime rate”

six-month interest

periods (with

secured overnight

bear interest at an annual

rate equal to SOFR for

the interest period selected plus

basis points plus

basis points.

Facility charges

on unutilized

commitments at

commitments are

unutilized and

commitments are

Facility charges

collateral monitoring fee and customary fees for letters of credit.

The ABL Facility

matures on March

The ABL Facility

may be prepaid

including, without limitation, outstanding borrowing exposures

exceeding the borrowing base and

dispositions of assets outside of the ordinary course of business.

Accrued interest is payable (a) at the end

of each interest period for borrowings based upon the SOFR

rate (but not to exceed three months) and

monthly for borrowings based upon the base rate.

obligations under

certain related

obligations) are

other borrowers

the Company’s

future domestic

subsidiaries is

addition, the

borrowers’ obligations are

a first-priority

Loan Parties,

subject to certain exceptions.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Cash Dominion.

ABL Facility,

default exists

borrowing availability

Availability”)

become subject

cash dominion,

require prepayment

the cash deposited in

certain deposit accounts of

the Loan Parties, including

a concentration account, and

concentration

dominion period

longer exists,

and in the case of when Excess Availability falls below the threshold described in the first sentence of this

paragraph, when Excess Availability exceeds such threshold for a period of

consecutive days.

customary representations

warranties, affirmative

negative covenants

qualifications),

Company’s ability to, among other things:

incur additional indebtedness;

create liens on its assets;

make investments, including loans and advances to foreign subsidiaries;

pay dividends and make other restricted payments;

sell certain assets outside of the ordinary course of business;

consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets;

make acquisitions;

enter into transactions with affiliates.

acquisitions,

indebtedness,

substantially

payments, if the Company can satisfy the following payment conditions:

no default or event of

default under

revolving credit loans

outstanding, (iii) the

have unrestricted

million, (iv)

business days’

compliance with the foregoing clauses and demonstrating the calculations required

Recently Adopted Accounting

Pronouncements:

In November 2023,

07, “Segment Reporting (Topic

Improvements to Reportable Segment Disclosures,”

which requires

fourth quarter

retrospective application

periods presented

financial statements.

Company's financial

statements in

additional information related to segment expenses.

Recently Adopted

Accounting Pronouncements:

Disclosures,”

disaggregated

effective tax

rate reconciliation, as

well as information

on income taxes

The Company adopted

retrospective basis

ended January

“Income Taxes.”

Recently Issued Accounting Pronouncements:

In December 2023, the

In November 2024, the FASB

issued ASU 2024-03,

“Income Taxes (Topic

Improvements to Income Tax Disclosures,” which modifies the requirements

on income tax disclosures to require disaggregated information about

a reporting entity’s effective tax rate

reconciliation

“Income Statement – Reporting Comprehensive Income –

Expense Disaggregation Disclosures (Subtopic

Disaggregation of Income Statement Expenses,” which requires public entities to disclose, on an

annual and interim basis, disaggregated information in the footnotes about

specified information related to

certain costs

and expenses.

effective for

annual periods

beginning after

December 15, 2024

public business

entities, with early

adoption and retrospective

adoption of this new guidance on its consolidated financial statements and

related disclosures.

“Income Statement—Reporting

Comprehensive

Income—Expense

Disaggregation

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

disaggregated

guidance is effective for annual periods beginning after December 15, 2026 and for interim periods within

fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently

financial statements and related disclosures.

of evaluating

the potential

on its consolidated financial statements and related disclosures.

pronouncements and

will have a material impact on the Company’s financial statements.

Interest and Other Income:

1 unchanged sentence

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

Dividend income

Interest income

State recovery grant

Insurance proceeds

Miscellaneous income

Net loss (gain) on investment sales

Net gain on investment sales

Interest and other income

COVID-19 pandemic.

Additionally,

During fiscal

Company received

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

Ida and Laura

in 2021 and 2020.

the insurance

claim settlement

of its corporate jet, which had sustained damage in fiscal 2023.

The Company recorded a net gain of $

million which

the accompanying

Consolidated Statements

Income (Loss) and Comprehensive Income (Loss) for the year ended February

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Short-Term Investments:

6 unchanged sentences

comprehensive

February 1, 2025 and February 3, 2024 (in thousands):

February 1, 2025

January 31, 2026 and February 1, 2025 (in thousands):

January 31, 2026

February 1, 2025

15 unchanged sentences

(in thousands):

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

February 1, 2025

January 31, 2026

February 1, 2025

1 unchanged sentence

Short-Term Investments

Equity Investments

THE CATO CORPORATION

4 unchanged sentences

assets that are measured

at fair value as of February 1, 2025 and February 3, 2024 (in thousands):

February 1, 2025

State/Municipal Bonds

at fair value as of January 31, 2026 and February 1, 2025 (in thousands):

January 31, 2026

Corporate Bonds

1 unchanged sentence

Cash Surrender Value of Life Insurance

Asset-backed Securities (ABS)

Deferred Compensation

6 unchanged sentences

Asset-backed Securities (ABS)

Corporate Equities

Deferred Compensation

Total Liabilities

governmental debt securities held in managed accounts

with underlying ratings of A or

better at February

municipal and corporate bonds and

asset-backed securities have contractual maturities

which range from

Treasury notes have contractual maturities which range

securities are classified

as available-for-sale

accompanying Consolidated

Balance Sheets.

comprehensive income.

Additionally,

corporate equities,

respectively,

recorded within

Consolidated Balance Sheets.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

available on active exchanges for identical

investment portfolio

was primarily

corporate bonds

and taxable governmental debt securities held in managed accounts with underlying ratings of A or better.

Treasury notes have a contractual maturity of

investment securities

include corporate,

municipal bonds

quoted prices

not be available on active exchanges for identical instruments.

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

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

1 unchanged sentence

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

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Consolidated Balance Sheets.

12 unchanged sentences

measured using Level 3 inputs for the

years ended February 1, 2025 and

years ended January 31, 2026 and

February 1, 2025

8 unchanged sentences

changes in net assets)

Ending Balance at February 1, 2025

Ending Balance at January 31, 2026

Measurements Using

5 unchanged sentences

changes in net assets)

Ending Balance at February 1, 2025

Ending Balance at January 31, 2026

Measurements Using

2 unchanged sentences

Surrender Value

Beginning Balance at January 28, 2023

Beginning Balance at February 3, 2024

Total gains or (losses)

5 unchanged sentences

Liability Inputs (Level 3)

Beginning Balance at January 28, 2023

Beginning Balance at February 3, 2024

Total (gains) or losses

7 unchanged sentences

Accounts receivable consist of the following (in thousands):

February 1, 2025

January 31, 2026

February 1, 2025

9 unchanged sentences

for the fiscal

years ended February 1, 2025, February 3, 2024

and January 28,

years ended January 31, 2026, February 1, 2025

and February 3,

respectively,

3 unchanged sentences

Consolidated Statements of Income (Loss) and Comprehensive Income

During fiscal 2024, the Company received $

million from the insurance claim settlement and sale of

its corporate

had sustained

million which

the accompanying

Consolidated Statements

Income (Loss) and Comprehensive Income (Loss) for the year ended February

Property and Equipment:

Property and equipment consist of the following (in thousands):

February 1, 2025

January 31, 2026

February 1, 2025

11 unchanged sentences

Accrued expenses consist of the following (in thousands):

February 1, 2025

January 31, 2026

February 1, 2025

6 unchanged sentences

Financing Arrangements:

At February 1,

2025, the Company had

an unsecured revolving credit

agreement, which provided

borrowings of

revocable letters

commitments, and

was committed

credit agreement

contained various

covenants and limitations, including the maintenance of specific

financial ratios with which the Company

was not in compliance as of

February 1, 2025.

borrowings outstanding, or any outstanding

credit, under

ended February

Company terminated

unsecured revolving

credit when it entered into

million asset-backed revolving line of credit

(the “ABL Facility”)

secured primarily by

inventory and third-party

credit card receivables.

31, 2025 there

additional information regarding the ABL Facility, see Note 1 to the Consolidated Financial Statements.

February 1, 2025 or at February 3, 2024.

2024, the Company amended

the now terminated

unsecured revolving credit agreement

to modify a definition used in calculating the Company’s

minimum EBITDAR coverage ratio to add back

corresponding minimum

determine the

EBITDAR coverage ratio in exchange for a secured position in any

future borrowings.

On March 13, 2025,

and certain other domestic subsidiaries, as

documents, by and among the Company, certain other of the Company’s

domestic subsidiaries, and Wells

credit facility (the “ABL Facility”) in an amount up to $

The proceeds from the ABL Facility

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

corporate purposes.

The ABL Credit

Agreement is committed

and is secured

primarily by inventory

and third-party

borrowings outstanding

availability under

borrowing availability

weighted average

rate under the credit facility was

at January 31, 2026 due to

outstanding borrowings.

Stockholders’ Equity:

26 unchanged sentences

Class B Common

partnerships controlled

Company’s employee benefit

3 unchanged sentences

Class A Common Stock.

shares outstanding

ended January

February 1, 2025, and February 3, 2024 are presented below (in thousands):

January 28, 2023

Share-based compensation

February 3, 2024

Share-based compensation

February 1, 2025

Share-based compensation

January 31, 2026

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Employee Benefit Plans:

8 unchanged sentences

discretion of

contribution for

ended February

The Company’s

contributed $

contributions

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

approximately

6 unchanged sentences

Compensation Committee of the

Board of Directors and

can be made in

Company Class A Common

stock or cash.

net operating

Directors and

Company Class

Committee did

contribution was

year ended January 28, 2023.

contribution to

ESOP for the years ended January 31, 2026, February 1, 2025, and February

The Company is primarily self-insured for healthcare.

12 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

period recorded.

The Company funds healthcare contributions

to a third-party provider.

The Company funds healthcare contributions to a

third-party provider.

The Company determines whether an

16 unchanged sentences

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

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

Operating lease cost (a)

4 unchanged sentences

) million for the twelve months ended

February 1, 2025, February 3, 2024, and January 28, 2023 respectively.

January 31, 2026, February 1, 2025, and February 3, 2024 respectively.

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

1 unchanged sentence

information and

non-cash activity related

Company’s operating

non-cash activity

the Company’s

operating leases

are as follows (in thousands):

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Operating cash flow information:

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

Cash paid for amounts included in the measurement of

10 unchanged sentences

operating leases

February 1, 2025

January 31, 2026

February 1, 2025

24 unchanged sentences

positions as of

February 1, 2025,

January 31, 2026,

February 1, 2025

3 unchanged sentences

Comprehensive Income

ended January

2026, February

respectively.

12 unchanged sentences

— (Continued)

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

Balances, beginning

Additions for tax positions of the current year

Additions for tax positions of prior years

Reduction for tax positions of prior years for:

1 unchanged sentence

Balances, ending

The provision for income taxes consists of

the following (in thousands):

The (benefit) provision for income

taxes consists of the following (in thousands):

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

Current income taxes:

Deferred income taxes:

Total income tax expense

Total income tax (benefit) expense

THE CATO CORPORATION

6 unchanged sentences

(in thousands):

February 1, 2025

January 31, 2026

February 1, 2025

21 unchanged sentences

The changes in the valuation allowance are presented below:

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

Allowance Beginning Balance

2 unchanged sentences

Allowance Ending Balance

As of February

As of January

31, 2026, the

Company had $

2 unchanged sentences

attributable to state

carryforwards

Company assessed the likelihood that deferred tax

assets related to state net operating

loss carryforwards and

other deferred tax

assets affecting state

income tax will

on this assessment,

concluded that it is more likely than not the Company will not be able to

million and $

net operating losses

deferred assets, respectively,

and accordingly, has

allowance for the same amount.

operating loss carryforwards.

The Company assessed the

likelihood that deferred tax assets related to

operating loss

carryforwards and

other deferred

affecting state

assessment, the

Company concluded

operating losses,

and accordingly,

allowance for

attributable to

23 unchanged sentences

million for the

year ended February

year ended January

recording a valuation allowance of

21 unchanged sentences

subsidiaries.

Domestic losses

respectively,

jurisdictions of $

million, and $

million, respectively.

THE CATO CORPORATION

4 unchanged sentences

statutory rate is as follows:

January 31, 2026

February 1, 2025

February 3, 2024

January 28, 2023

Federal income tax rate

State income taxes

Global intangible low-taxed income

Foreign tax credit

Foreign rate differential

Federal Statutory Tax

State and Local Income Taxes,

Federal Income Tax

Tax Rate Differential

Offshore Claim

Other foreign jurisdictions

Effect of Changes in Tax

Laws or Rates

Enacted in the Current Period

Change in Tax Rate

Effect of Cross-Border Tax

Global intangible low-taxed income

Research and development tax credits

Employment related tax credits

Changes in Valuation

Nontaxable or Nondeductible items

Limitation on officer compensation

Work opportunity credit

Addback on wage related credits

Tax credits - Other

Charitable contribution of inventory

Uncertain tax positions

Deferred rate change

Effective income tax rate

ended February 1, 2025 and the

federal income tax rate is

the valuation allowance (discussed above)

carryforwards, other credit carryforwards and all other deferred tax assets net

of deferred tax liabilities.

Share-based payment awards

Changes in Unrecognized Tax

Effective Tax

(a) State taxes in South Carolina and Texas

made up the majority (greater than

%) of the tax effect in this category for

the years ended January 31, 2026, February 1, 2025, and February 3, 2024,

respectively.

Reportable Segment Information:

including Cato,

Fashion, Verso

operating segments, including e-commerce, based on

the aggregation criteria outlined in ASC

280-10, which

states that two or more operating segments may be aggregated into a single reportable segment if aggregation

is consistent with the objective

and basic principles of ASC 280-10,

which require the segments have similar

economic characteristics, products, production processes, customers

and methods of distribution.

The Company has determined

operating segments, as defined

under ASC 280 – Segment

Reporting (“ASC 280”), including Cato, It’s

Fashion, Versona and Credit.

The Company has

has aggregated

retail operating

segments, including

commerce, based on the aggregation criteria outlined in ASC 280-10, which states

that two or more operating

be aggregated

single reportable

aggregation is

consistent with

the objective

characteristics,

products, production processes, clients and methods of distribution.

characteristics

financial and

competitive risks.

operating segment

retail operating

production processes.

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

customers in a similar manner.

The Company offers its own credit

1 unchanged sentence

all credit authorizations, payment processing

and collection efforts are performed by

a wholly-owned subsidiary of the

allocate certain corporate expenses to the Credit segment.

THE CATO CORPORATION

1 unchanged sentence

— (Continued)

and collection efforts are

performed by a

wholly-owned subsidiary of

Company does not

allocate certain corporate expenses to

the Credit segment.

assesses information for

6 unchanged sentences

the retail segment.

Interest and other income

from assets held

and other income from

allocated to either segment.

expenses, and

operations before

budget and forecasting process,

monthly analyses of budget-to-actual

and prior year

segment income

(loss) before

annual budget

budget-to-actual

administrative

therefore, total segment assets are not presented in the tables below.

segment assets is reported on the balance sheet as total consolidated

The accounting

1 unchanged sentence

described in the

Accounting Policies in

evaluates performance based on

profit or loss from

before income taxes.

9 unchanged sentences

Interest and other income

Income (loss) before income taxes

Segment income (loss) before income taxes

Corporate interest and other income

Net income (loss) before income taxes

Loss before income taxes

Capital expenditures

4 unchanged sentences

Interest and other income

Income (loss) before income taxes

Segment income (loss) before income taxes

Corporate interest and other income

Net income (loss) before income taxes

Loss before income taxes

Capital expenditures

4 unchanged sentences

Interest and other income

Income (loss) before income taxes

Segment income (loss) before income taxes

Corporate interest and other income

Net income (loss) before income taxes

Loss before income taxes

Capital expenditures

2 unchanged sentences

and benefits, insurance, supplies, advertising, bank and credit card processing fees.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

Stock Based Compensation:

2 unchanged sentences

officers, directors and key employees.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

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

stock initially authorized

and available for grant under this plan as of February 1, 2025:

and available for grant under this plan as of January 31, 2026:

Options and/or restricted stock initially authorized

1 unchanged sentence

February 1, 2025

January 31, 2026

In accordance with ASC 718, the fair value of restricted stock awards is estimated on the date of grant

14 unchanged sentences

restricted stock outstanding

the years ended February 1, 2025,

February 3, 2024 and January 28, 2023:

the years ended January 31, 2026,

February 1, 2025 and February 3, 2024:

Weighted Average

2 unchanged sentences

Forfeited or expired

Restricted stock awards at January 28, 2023

Forfeited or expired

Restricted stock awards at February 3, 2024

1 unchanged sentence

Restricted stock awards at February 1, 2025

Forfeited or expired

Restricted stock awards at January 31, 2026

% discount through

8 unchanged sentences

approximately

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

2025, 2024 and 2023,

5 unchanged sentences

Commitments and Contingencies:

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

— (Continued)

litigation instituted

23 unchanged sentences

Accumulated Other Comprehensive Income:

reclassification

comprehensive income (in thousands) for the

year ended February 1, 2025:

The following

forth information

regarding the

Accumulated other

comprehensive

income (in thousands) for the

year ended January 31, 2026:

Changes in Accumulated Other

8 unchanged sentences

other comprehensive income (b)

Net current-period other comprehensive income

Ending Balance at February 1, 2025

Net current-period other comprehensive income (loss)

Ending Balance at January 31, 2026

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

Amounts in parentheses indicate a debit/reduction to

accumulated other

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 gains on available-for-sale securities.

The tax impact of this reclassification was $

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.

tax impact of this reclassification was $

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

THE CATO CORPORATION

1 unchanged sentence

— (Continued)

The following table sets forth information regarding the reclassification

out of Accumulated other

comprehensive income (in thousands) for the year ended February 3, 2024:

The following table sets forth information regarding the changes

in Accumulated other comprehensive

income (in thousands) for the year ended February 1, 2025:

Changes in Accumulated Other

3 unchanged sentences

Available-for-Sale

Beginning Balance at January 28, 2023

Beginning Balance at February 3, 2024

Other comprehensive income (loss) before

5 unchanged sentences

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

Amounts in parentheses indicate a debit/reduction to

accumulated other

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

impact of Accumulated other comprehensive income reclassifications into Interest and

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

4 unchanged sentences

— (Continued)

The following table sets forth information regarding the reclassification

out of Accumulated other

comprehensive income (in thousands) for the year ended January 28, 2023:

The following table sets forth information regarding the changes

in Accumulated other comprehensive

income (in thousands) for the year ended February 3, 2024:

Changes in Accumulated Other

9 unchanged sentences

Net current-period other comprehensive income (loss)

Ending Balance at January 28, 2023

Ending Balance at February 3, 2024

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

Amounts in parentheses indicate a debit/reduction to

accumulated other

Amounts in parentheses indicate a debit/reduction

to accumulated other

comprehensive income.

6 unchanged sentences

Financial Disclosure:

Not applicable.

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