Cato profit falls as sales decline to $164 million

• Cato (NYSE:CATO) reported Q2 2026 sales of $163.9 million, down 6% year-over-year.
• Net income declined to $1.1 million from $6.8 million a year earlier as margins weakened.
• The company closed eight stores during the quarter and ended with 1,057 locations across 31 states.

Cato (NYSE:CATO) reported second quarter 2026 net income of $1.1 million, or $0.06 per diluted share, as sales declined 6% year-over-year to $163.9 million due to lower same-store sales.

The results compared with the prior-year period, when Cato reported net income of $6.8 million and $0.35 per diluted share, while same-store sales declined 3.7% during the latest quarter.

Cato reported gross margin declined to 32.8% from 36.2% due to lower merchandise margins and occupancy deleverage, while selling, general and administrative expenses represented 33.0% of sales despite a $3.3 million reduction in absolute costs.

For the first half of 2026, Cato reported net income of $10.5 million compared with $10.1 million a year earlier, while sales declined 2.9% to $333.3 million and year-to-date gross margin decreased to 35%.

Cato closed eight stores during the quarter and ended the period with 1,057 stores across 31 states, while management said consumer discretionary spending pressures may continue to affect results during the second half of 2026.