The company reported a net loss of $5.2 million, or ($0.28) per diluted share, compared with a loss of $15.1 million, or ($0.79) per diluted share, a year earlier. Quarterly sales rose 6 per cent to $153.7 million, with same-store sales up 10 per cent, Cato said in a press release.
SG&A expenses declined to $57.0 million, lowering the rate to 37.1 per cent of sales from 40.0 per cent last year, reflecting reduced payroll, professional fees and insurance costs. The company recorded a tax benefit of $1.2 million, driven by lower foreign taxes and reserve roll-offs.
For the nine-month period, Cato posted net income of $5 million, or $0.25 per diluted share, reversing a $4 million loss in the prior year. Sales increased 2 per cent to $496.8 million, with same-store sales up 6 per cent. Year-to-date gross margin improved to 34.5 per cent, while the SG&A rate fell to 34.2 per cent due to lower payroll and insurance costs. SG&A expenses decreased to $169.7 million from $172.8 million. The company also recorded a $0.5 million tax benefit compared with a tax expense of $1.6 million last year.
As part of its footprint optimisation, the company closed 16 stores year-to-date. Cato operated 1,101 stores across 31 states as of November 1, 2025, compared with 1,167 stores a year earlier.
“Our positive second quarter sales trend continued into the third quarter. We attribute this, in part due to 2024 third quarter sales being negatively impacted by three major hurricanes over a five-week span and supply chain issues causing late merchandise receipts to the stores,” said John Cato, chairman, president, and CEO at Cato. “We believe the fourth quarter will be challenging due in part to the slowdown in employment growth and lower expected economic growth. We will continue to tightly manage our expenses and inventory levels, while driving continued sales growth in the fourth quarter.”
ALCHEMPro News Desk (SG)
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