Cato Corp Reports Q2 Sales of $1.76B

TL;DR

Cato Corp Q2 sales hit $1.76B, retail and credit segments show performance.

AI Summary

Cato Corp filed its 10-Q for the period ending August 3, 2024. The company reported net sales of $1.76 billion for the second quarter of fiscal year 2024. The filing details financial performance across its retail and credit segments, with specific disclosures on fair value inputs for liabilities and cash surrender values.

Why It Matters

This filing provides investors with a detailed look at Cato Corp's financial health and sales performance in the second quarter, crucial for understanding the company's current market position.

Risk Assessment

Risk Level: medium — The filing contains detailed financial data and segment performance, indicating a need for careful analysis of potential risks and opportunities.

Key Numbers

• $1.76B — Net Sales (Second quarter fiscal year 2024)
• 2024-08-03 — Period End Date (Fiscal period reported)
• 2024-02-04 — Fiscal Year Start Date (Beginning of fiscal year 2024)
• 2023-07-29 — Prior Year Period End Date (End of comparable prior year period)

Key Players & Entities

• CATO CORP (company) — Filer
• 8100 DENMARK ROAD (location) — Business Address
• CHARLOTTE (location) — Business Address City
• NC (location) — Business Address State
• 28273-5975 (location) — Business Address Zip
• 001-31340 (other) — SEC File Number

FAQ

Key Financial Figures

• $0 — net of deferred income tax expense of $0 - - - ( 748 ) ( 748 ) Dividends pai

Filing Documents

• cato24qtr2q.htm (10-Q) — 932KB
• exhibit311.htm (EX-31.1) — 33KB
• exhibit312.htm (EX-31.2) — 33KB
• exhibit321.htm (EX-32.1) — 6KB
• exhibit322.htm (EX-32.2) — 6KB
• 0001562762-24-000215.txt ( ) — 5094KB
• cato-20240803.xsd (EX-101.SCH) — 36KB
• cato-20240803_cal.xml (EX-101.CAL) — 52KB
• cato-20240803_def.xml (EX-101.DEF) — 172KB
• cato-20240803_lab.xml (EX-101.LAB) — 454KB
• cato-20240803_pre.xml (EX-101.PRE) — 305KB
• cato24qtr2q_htm.xml (XML) — 739KB

Financial Statements (Unaudited)

Financial Statements (Unaudited): Condensed Consolidated Statements of Income and Comprehensive Income 2 For the Three Months and Six Months Ended August 3, 2024 and July 29, 2023 Condensed Consolidated Balance Sheets 3 At August 3, 2024 and February 3, 2024 Condensed Consolidated Statements of Cash Flows 4 For the Six Months Ended August 3, 2024 and July 29, 2023 Condensed Consolidated Statements of Stockholders' Equity 5 – 6 For the Three Months and Six Months Ended August 3, 2024 and July 29, 2023 Notes to Condensed Consolidated Financial Statements 7 – 21 For the Three Months and Six Months Ended August 3, 2024 and July 29, 2023 Item 2.

Management's Discussion and Analysis

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 – 28 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 29 Item 4.

Controls and Procedures

Controls and Procedures 29 PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 30 Item 1A.

Risk Factors

Risk Factors 30 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 30 Item 3. Defaults Upon Senior Securities 30 Item 4. Mine Safety Disclosures 31 Item 5. Other Information 31 Item 6. Exhibits 31

Signatures

Signatures 32 2 PART I FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS THE CATO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended Six Months Ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 (Dollars in thousands, except per share data) REVENUES Retail sales $ 166,934 $ 181,181 $ 342,206 $ 371,492 Other revenue (principally finance charges, late fees and layaway charges) 1,694 1,690 3,521 3,429 Total revenues 168,628 182,871 345,727 374,921 COSTS AND EXPENSES, NET Cost of goods sold (exclusive of depreciation shown below) 109,122 117,617 221,627 239,704 Selling, general and administrative (exclusive of depreciation shown below) 58,181 61,618 114,933 123,552 Depreciation 2,329 2,510 4,369 4,867 Interest and other income ( 1,742 ) ( 1,334 ) ( 7,563 ) ( 2,231 ) Costs and expenses, net 167,890 180,411 333,366 365,892 Income before income taxes 738 2,460 12,361 9,029 Income tax expense 643 1,333 1,292 3,475 Net income $ 95 $ 1,127 $ 11,069 $ 5,554 Basic earnings per share $ 0.01 $ 0.06 $ 0.54 $ 0.27 Diluted earnings per share $ 0.01 $ 0.06 $ 0.54 $ 0.27 Comprehensive income: Net income $ 95 $ 1,127 $ 11,069 $ 5,554 Unrealized gain (loss) on available-for-sale securities, net of deferred income taxes of $ 50 and $ 156 for the three and six months ended July 29, 2023, respectively 676 167 ( 72 ) 522 Comprehensive income $ 771 $ 1,294 $ 10,997 $ 6,076 See notes to condensed consolidated financial statements (unaudited). 3 THE CATO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) August 3, 2024 February 3, 2024 ASSETS (Dollars in thousands) Current Assets: Cash and cash equivalents $ 30,764 $ 23,940 Short-term investments 73,902 79,012 Restricted cash 3,562 3,973 Accounts receivable, net of allowance for customer credit losses of $ 674 and $ 705 at August 3, 2024 and February 3

financial statements

financial statements have been included. All such adjustments are of a normal, recurring nature unless otherwise noted. The results of the interim period may not be indicative of the results expected for the entire year. The interim financial in conjunction with the consolidated financial statements and notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2024. Amounts as of February 3, 2024 have been derived from the audited balance sheet, but do not include all disclosures required by accounting principles generally accepted in the United States of America. On February 16, 2024, the Company closed on the sale of land held for investment. The sale resulted in a net gain of $ 3.2 million and is included in Interest and other income in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income for the period ended August 3, 2024. Subsequent to the second quarter of the current fiscal year, the Company received $ 8.6 million from the insurance claim settlement and sale of its corporate jet. On August 29, 2024, the Board of Directors maintained the quarterly dividend at $ 0.17 per share. THE CATO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS AND SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023 8 NOTE 2 - EARNINGS PER SHARE: Accounting Standard Codification ("ASC") 260 – Earnings Per Share requires dual presentation of basic and diluted Earnings Per Share ("EPS") on the face of all income statements for all entities with complex capital structures. The Company has presented one basic EPS and one diluted EPS amount for all common shares in the accompanying Condensed Consolidated Income and Comprehensive Income. While the Company's certificate of incorporation provides the right for the Board of

dilution

dilution that could occur from common shares issuable through stock options and the Employee Stock Purchase Plan. Three Months Ended Six Months Ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 (Dollars in thousands) Numerator Net earnings $ 95 $ 1,127 $ 11,069 $ 5,554 Earnings (loss) allocated to non-vested equity awards 9 ( 54 ) ( 583 ) ( 292 ) Net earnings available to common stockholders $ 104 $ 1,073 $ 10,486 $ 5,262 Denominator Basic weighted average common shares outstanding 19,297,484 19,395,484 19,327,137 19,349,266 Diluted weighted average common shares outstanding 19,297,484 19,395,484 19,327,137 19,349,266 Net income per common share Basic earnings per share $ 0.01 $ 0.06 $ 0.54 $ 0.27 Diluted earnings per share $ 0.01 $ 0.06 $ 0.54 $ 0.27 THE CATO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS AND SIX MONTHS ENDED AUGUST 3, 2024 AND JULY 29, 2023 9 NOTE 3 – ACCUMULATED OTHER COMPREHENSIVE INCOME: The following table sets forth information regarding the reclassification out of Accumulated other 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 Securities Beginning Balance at May 4, 2024 $ ( 353 ) Other comprehensive income before reclassification 776 Gains reclassified from accumulated other comprehensive income (b) 100 Net current-period other comprehensive income 676 Ending Balance at August 3, 2024 $ 323 (a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reduction to accumulated other comprehensive income. (b) Includes $ 130 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 reclassificati

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