The Cato Corporation reported a narrowed net loss of $5.2 million, or $0.28 per diluted share, for the quarter ended November 1, 2025, compared with a $15.1 million loss, or $0.79 per diluted share, for the same period in 2024. Total revenue rose 6% to $153.7 million, driven by a 10% increase in same‑store sales, while gross margin improved to 32.0% of sales from 28.8% a year earlier. Selling, general and administrative expenses fell to $57.0 million, a $0.9 million reduction from the prior year, as lower payroll, professional fees and insurance costs were offset by higher markdowns.
The improvement in gross margin reflects a combination of lower freight, distribution, buying and occupancy costs, and a disciplined inventory strategy that reduced markdowns. The 10% lift in same‑store sales indicates that core store traffic and average transaction values have strengthened, while the company’s focus on cost control has helped offset the impact of higher inventory levels at the end of the quarter.
Year‑to‑date, Cato generated a net income of $5.0 million, or $0.25 per diluted share, versus a net loss of $4.0 million, or $0.24 per diluted share, for the nine months ended November 2, 2024. Revenue for the year to date grew 2% to $496.8 million, and same‑store sales increased 6%, underscoring a steady recovery from the supply‑chain disruptions that weighed on the prior year’s results.
Management cautioned that the fourth quarter will be challenging, citing a slowdown in employment growth and lower expected economic growth. The company plans to continue tightening expenses and inventory levels while pursuing sales growth, signaling confidence in its cost‑control program but acknowledging macro headwinds.
Investors reacted negatively to the earnings release, with analysts noting that the results fell short of expectations. The net loss, despite narrowing, and the cautious outlook for the final quarter contributed to the market’s subdued response.
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