Cato Fashions net income improves to 6.8 million dollars in second quarter

The Cato Corporation has reported an increase in net income for the second quarter ended August 2, 2025. The company's net income reached 6.8 million dollars, or 35 cents per diluted share, a sharp rise from the 0.1 million dollars reported in the same quarter last year. This improvement was driven by a 5 percent increase in sales, which reached 174.7 million dollars, and a 9 percent same-store sales increase compared to the second quarter of 2024.

For the first six months of the year, sales were 343.1 million dollars, a slight increase of 0.3 percent from the prior year primarily due to a 4 percent same-store sales increase compared to 2024, offset by the impact of closed stores. However, net income for this period decreased to 10.1 million dollars, or 51 cents per diluted share, compared to 11.1 million last year dollars.

Chairman, president, and CEO John Cato attributed the improved sales trend to the absence of supply chain disruptions that impacted sales in 2024. He noted that the company will "continue to tightly manage our expenses" as it anticipates a challenging second half of 2025 due to "continued uncertainty regarding tariffs and the potential negative impact on our product acquisition costs".

The company's financial results were also positively impacted by improved margins. Gross margin increased from 34.6 percent to 36.2 percent of sales in the quarter, largely due to lower distribution and buying costs.

The company closed eight stores during the quarter, bringing its total to 1,101 stores across 31 states as of August 2, 2025.