Cato Corporation Reports Third Quarter Results for 2025

In the third quarter of 2025, Cato reported a net loss of $5.2 million, translating to a loss of $0.28 per diluted share. This marks a significant improvement from the net loss of $15.1 million, or $0.79 per diluted share, reported for the third quarter of 2024. The shift indicates a stronger operational performance amidst ongoing economic challenges.

Sales for the quarter reached $153.7 million, reflecting a 6% increase from $144.6 million in the same period last year. Notably, the company's same-store sales saw a substantial increase of 10% compared to 2024, suggesting a rebound in consumer demand and effective marketing strategies.

For the year-to-date period ending November 1, 2025, total sales amounted to $496.8 million, a 2% rise from $486.8 million during the same nine months in 2024. Year-to-date same-store sales also increased by 6%, showcasing consistent growth across the company's retail locations.

John Cato, Chairman, President, and CEO, attributed the positive sales trend to several factors, including the adverse impact of three major hurricanes that disrupted sales in the third quarter of 2024. Cato emphasized the importance of managing expenses and inventory levels as the company prepares for potentially challenging conditions in the fourth quarter, driven by slowing employment growth and lower expected economic growth.

The company reported an increase in gross margin, rising from 28.8% to 32.0% of sales for the quarter, largely due to reduced freight, distribution, buying, and occupancy costs. However, this was slightly offset by higher markdowns. Selling, General and Administrative (SG&A) expenses also saw a reduction, decreasing from 40.0% to 37.1% of sales, primarily due to lower payroll, professional fees, and insurance costs.

For the nine-month period, the gross margin improved to 34.5% from 33.3% the previous year, while SG&A expenses dropped from $172.8 million to $169.7 million.

Year-to-date, Cato has closed 16 stores, bringing the total to 1,101 locations across 31 states as of November 1, 2025, compared to 1,167 stores a year prior. This strategic decision aligns with the company’s efforts to optimize its retail footprint while focusing on profitability.

Cato's diverse retail offerings include Cato, Versona, and It's Fashion, each providing value-priced fashion apparel and accessories. The company continues to attract customers seeking quality and affordability, with its merchandise available in-store and online.

Cato Corporation's third-quarter results demonstrate a positive trend in sales and a reduction in losses, reflecting the effectiveness of its operational strategies in a complex retail landscape. As the company anticipates a challenging fourth quarter, it remains focused on expense management and continued sales growth. Investors and stakeholders will be watching closely to see how Cato navigates the upcoming economic conditions and maintains its momentum in the market.