CATO 10-K & 10-Q changes, risk factors and insider trading
Cato Corp. · NYSE · Retail-Women's Clothing Stores · CIK 18255 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Company’s specifications may adversely affect the Company’s business, results of operations and financial condition.”
New heading “We are exposed to risks related to the use of”
New heading “AI by us and our competitors.”
New heading “The terms of our asset-based revolving credit facility (“ABL”
Removed heading “If the Company is unable to successfully integrate new businesses into its existing business, the”
Removed heading “Company’s financial condition and results of operations will be adversely affected.”
Largest changes
“directly import some of this merchandise and indirectly import the remaining merchandise domestic vendors who acquire the merchandise from foreign sources. Further, our third-party vendors are dependent China, increase as a result of newly implemented tariffs on Chinese products. …”see in full comparison
“directly import some of this merchandise and indirectly import the remaining merchandise domestic vendors who acquire the merchandise from foreign sources. Further, our third-party vendors are dependent materials China, materials increase as a result of newly implemented tariffs on Chinese products. …”see in full comparison
“and international restrictions trade, license permit import export license protection environmental records management regulations, tariffs and taxes and anti-corruption laws, violations of which by employees or persons acting behalf may in significant investigation costs, severe criminal sanctions reputational harm.”see in full comparison
“and international restrictions trade, license permit import export license protection records management regulations, tariffs and taxes and anti-corruption laws, violations of which by employees or persons acting behalf may in significant investigation costs, severe criminal sanctions reputational harm.”see in full comparison
see in full comparisonfailureIn addition, the covenantscouldunderresultourinABLanFacilityeventincludeofrestrictionsdefault,that,whichamongcouldotheradverselythings,affectlimit our ability torespondincur additional indebtedness, create liens on assets, make investments, loans or advances, engage in mergers, consolidations, sell assets, make acquisitions, pay dividends and make other restricted payments, and enter into transactions with affiliates. A failure by us to comply with these covenants could event default, respond business and manage our operations. Upon the occurrence of an event of default, the lenders could elect to declare all amounts outstanding to be immediately due and payable and exercise other remedies as set forth under our ABL Facility, including without limitation foreclosing collateral pledged lenders. If the indebtedness under our ABL Facility was to be accelerated, our future financial condition could be materially adversely affected.
“availability raw impacted demand fluctuations, regulation, tariffs, weather and crop yields, currency value fluctuations, inflation, as well as other factors.”see in full comparison
Full comparison: every changed paragraph (175)
You should carefully consider factors, addition report,
“Forward-looking
You should carefully consider factors, addition report, disclosures “Forward-looking Information” above evaluating occur persist, business, financial condition and operating results could be materially and adversely affected, the trading declinedecline, you lose your section only ones facing us.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial also materially and adversely affect our business, operating results, financial conditioncondition, and value reflect beliefs opinions future.
References events or contingencies are provided as examples only and should not be interpreted as a complete listing as any representation about whether or not such events or contingencies have occurred in the past may occur in the future.
Because we source a significant portion of our merchandise directly and indirectly from overseas, we are subject to risks associated with increased costs, changes, disruptions, increased costsdisruptions or other problems affecting the Company’s merchandise supply chain, risks associated with trade policies, including costs and uncertainties as the result of actual or threatened tariffs, the risks of conducting international operations and risks that affect the prevailing economic, social, economic,geopolitical, political,public health and other conditions in the areas from which we source merchandise. These risks have and could continue to materially and adversely affect the Company’s business, results of operations and financial condition.
own operate manufacturing facilities.
result, continued success tied timely receipt third party manufacturers reasonable cost.
Asia.Asia
Egypt.
transit times issues related a sustained drought in
Panama that causing longer transit times through the
Panama
Canal limiting containers vessel vessel draft restrictions.
disruptions from issues related to vessels transiting the
Suez Canal and Red
Sea, which are being forced to travel a much longer distance around the Cape of Good Hope due to the hostilities in the Middle East.
issues drive ocean delay deliveries, access already ocean container shipping capacity that we require.
we may be subject to additional costs related to our supply chain such as increased facility fees, fuel, peak surcharg es and other additional charges to transport our goods, which may increase our costs. We also are subject to domestic supply chain disruptions, including lack of intermodal transportation (trucks drivers), port congestion, dwell times for incoming container ships, lack of container yard capacity and lack available drayage from the ports and other conditions that impact our domestic supply chain. These supply chain risks have both transport merchandise and delayed arrivals to our stores, which adversely affect our ability to sell this merchandise and increase markdowns of it.
directly import some of this merchandise and indirectly import the remaining merchandise domestic vendors who acquire the merchandise from foreign sources. Further, our third-party vendors are dependent materials China, materials increase as a result of newly implemented tariffs on Chinese products. We are subject to numerous that can cause significant delays or interruptions in the supply merchandise or increase our These risks include political unrest, labor disputes, terrorism, war, public health threats, including but communicable diseases COVID-19 or pandemics), financial instability or other events resulting in disruption of trade from affecting our supply chain, imported imposition of, in, regulations or duties, quotas, tariffs, taxes or governmental policies regarding or responses imports.
geopolitical tensions, sanctions, prohibitions, threatened tariffs, have resulted produced regions.
Geopolitical tensions, conflicts, sanctions, prohibitions, threatened tariffs, compliance and reporting requirements have resulted in increased costs associated with merchandise produced in certain regions. Any new sanctions, tariffs and reporting requirements enacted in the future may further increase our costs associated with sourcing products from those regions or limit our ability to procure the products we source, and our ability to source these products from other regions may be limited or result in increased sourcing costs. If we are unable to pass these increased sourcing costs onto our vendors or our customers, it may adversely impact our results of operations.
are subject to supply chain disruptions transit times and costs, including disruptions from issues related to vessels transiting the Suez Canal and Red Sea, which are being forced to travel a much longer distance around the Cape of Good Hope due to the hostilities in the Middle East. These issues have and may continue to drive up our ocean freight costs, delay deliveries, access already ocean container shipping capacity that we require. Additionally, we may be subject to additional costs related to our supply chain such as increased facility fees, fuel costs, peak surcharges additional charges transport goods, disruptions, lack intermodal transportation (trucks drivers), port congestion, including increased dwell times for incoming container ships, lack of container yard capacity and lack of available drayage from the ports and other conditions that impact our domestic supply chain.
both transport merchandise and delayed merchandise arrivals to our stores, which adversely affect our ability to sell this merchandise and increase markdowns of it.
directly import some of this merchandise and indirectly import the remaining merchandise domestic vendors who acquire the merchandise from foreign sources. Further, our third-party vendors are dependent China, increase as a result of newly implemented tariffs on Chinese products. We are subject to numerous that can cause significant delays or interruptions in the supply merchandise or increase our These risks include political unrest, labor disputes, terrorism, war, public health threats, including but communicable diseases (such COVID-19 or pandemics), financial instability or other events resulting in disruption of trade from countries affecting our supply chain, imported imposition of, in, regulations or duties, quotas, tariffs, taxes or governmental policies regarding or responses these matters or other factors affecting the availability or cost of imports.
If we are unable to pass sourcing onto customers,
raise response increases limited, customers’ unwillingness pay discretionary items perceived effects of pricing pressure on consumer confidence, limited customer disposable income to purchase our products, sentiment outlook.
Moreover, persistence worsening conditions also lead our customers to reduce their amount current discretionary spending on even absence increases, erode volume results of operations and financial condition.
Consumer spending habits, spending accessories, affected by, among other things, prevailing social, economic, political and public health conditions and (such debate budgetary, spending policies), levels employment, fuel,fuel inflation, rates, energy food salaries wage rates sources of income, tax rates, home values, consumer net worth, the availability credit, confidence perceptions affecting any of these conditions. Any perception that these conditions may be worsening or continuing to trend negatively may significantly weaken many these drivers of consumer spending habits.
Adverse perceptions of these conditions uncertainties regarding them also generally cause consumers to defer purchasesdiscretionary items, cheaper alternatives merchandise, all of which may also net sales and results of operations.
In addition, numerous events, whether or economic conditions, as downturns markets, acts war terrorism, geopolitical uncertainty unrest natural disasters, outbreaks disease events, dampen confidence, accordingly, lead reduced consumer spending.
Any of these events could have a material adverse effect business, results operations and financial condition.
availability raw impacted demand fluctuations, regulation, tariffs, weather and crop yields, currency value fluctuations, inflation, as well as other factors.
Additionally, manufacturers have and may continue to have increases in other manufacturing costs, transportation, labor benefit increases production merchandise costs to the Company.
Due to the Company’s limited flexibility in price point, the pass increases consumer, effect on our margins, results of operations and financial condition.
inability effectively manage gross margin and results of operations.
To turnover support growth, continually attract, hire and train new store associates to meet our staffing needs. A significant increase in turnover among recruiting training costs, as well as possibly cause a decrease in our store operating efficiency and productivity.
compete for key management retailers, and inability attract qualified personnel limit ability to grow.
Shopping centers and malls where we currently operate existing stores or seek open new stores have been and to be adversely affected by, among other things, general economic downturns particularly affecting commercial real estate industry, closing of anchor stores, changes tenant mix shopping preferences, preference for online versus in-person shopping. To take advantage of consumer traffic and the shopping preferences consumers, need maintain acquire desirable locations competition for suitable store locations is intense. A decline in customer popularity strip shopping centers where we generally locate our stores or in availability of space in desirable centers and locations, or an increase in the cost of such desired space, has limited and could further limit our ability to open new traffic reducing increasing operating costs.
Our ability to open and operate new stores depends on many factors, some of which are beyond our control.
include, suitable locations, negotiate acceptable lease terms, secure necessary governmental permits and approvals and hire and train appropriate store personnel. In addition, our continued expansion into new regions of the country done present challenges competition, merchandising as we enter these new markets. Our failure to successfully and timely execute our plans for opening new stores or the failure of these stores to perform up to our expectations could adversely affect our business, results of operations and financial condition.
Continued high interest rates have adversely affected our customers’ discretionary income, in part due to increased interest costs associated with credit accounts including revolving credit accounts, car loans, mortgage loans and other credit accounts. In addition, the increased payments due to higher interest rates, combined continued inflationary pressures non-discretionary items, food, fuel sheltershelter, reduce our customers’ discretionary income and their willingness to purchase discretionary items such as apparel, shoes or jewelry products. Any reduction in our customers’ discretionary spending on our erode volume
Tight labor markets have caused wages to at the store, distribution center and home office levels, as making it more difficult to hire new associates and retain existing associates.
The tight labor inflation driving inflationary pressures on labor and raw materials used to make our products may continue to increase the cost we products.
unable increasing the retail prices products, reducing other expenses or otherwise, our business, margins, results of operations and financial condition may be adversely affected.
raise response limited, unwillingness perceived inflation increasing essential diminishing disposable income, sentiment or financial outlook. Moreover, the persistence or worsening of inflationary high lead even absence increases, erode sales volume and adversely affect our results of operations and financial condition.
Further, the activities conducted by our sourcing offices outside the United States subject us to foreign operational international elsewhere Factors” section, particular Risks Relating Legal Matters risks, as well as regulations and regulatory enforcement priorities, which could result in increased costs or divert attention otherwiseoperations and financial condition.”
Extreme weather, natural disasters, physical impacts climate change, threats or similar events can influence customer trends and shopping habits. For example, heavy rainfall or other extreme weather conditions, including but not limited to winter weather over a prolonged period, might difficult travel thereby reduce profitability.
Our business is also susceptible to unseasonable weather conditions. For example, extended periods of unseasonably warm temperatures during the winter season or cool weather during the summer season can render a portion of our inventory incompatible with those unseasonable conditions. Reduced from extreme prolonged unseasonable weather conditions The occurrence or threat of extreme weather, natural disasters, power outages, terrorist acts, outbreaks of flu communicable diseases (such COVID-19) catastrophic reduce traffic likewise disrupt conduct materially and adversely affect us.us and could adversely affect our reputation and results of operations.
long-term global expected unpredictable widespread.
variety risks.
physical extreme weather drought including disrupting our supply chain, the costs of our products and negatively impacting our workforce.
transition reputational risks. The potential cost of compliance with any future regulations may substantially increase our costs. For example, the use of certain commodities in the manufacture of our products and energy we regulation concerns, which could increase our costs. Furthermore, any failure of or perceived failure by us to comply stakeholder regarding the environment, could adversely affect our reputation and results of operations.
Shopping centers and malls where we currently operate existing stores or seek open new stores have been and may continue to be adversely affected by, among other things, general economic downturns particularly affecting commercial real estate industry, closing of anchor stores, changes tenant mix preferences, preference for online versus in-person shopping. To take advantage of consumer traffic and the shopping preferences consumers, need maintain acquire desirable locations competition for suitable store locations is intense. A decline in customer popularity strip shopping centers where we generally locate our stores or in availability of space in desirable centers and locations, or an increase in the cost of such desired space, has limited and could further limit our ability to open new traffic reducing increasing operating costs.
Our ability to open and operate new stores depends on many factors, some of beyond our control.
include, suitable locations, negotiate acceptable lease terms, secure necessary governmental permits and approvals and hire and train appropriate store personnel. In addition, our continued expansion into new regions of the country done challenges competition, merchandising as we enter these new markets. Our failure to successfully and timely execute our plans for opening new stores or the failure of these stores to perform up to our expectations could adversely affect our business, results of operations and financial condition.
The inability of third-party vendors to produce goods on time and to the Company’s specifications may adversely affect the Company’s business, results of operations and financial condition.
Company’s specifications may adversely affect the Company’s business, results of operations and financial condition.
dependence manufacture subjects numerous risks that our vendors will fail to perform as we expect. For example, the deterioration in any of our key vendors’ financial condition, their failure to ship merchandise in a timely manner that meets specifications, failures follow vendor guidelines compliant labor, environmental practices safety, expose operational, quality, competitive, reputational and legal risks. If we are not able to timely adequately replace the merchandise we currently source with merchandise produced elsewhere, or if our vendors fail perform as expect, business, results condition affected.
Our business operations subject us to compliance and litigation risks, as well as regulations and regulatory enforcement priorities, which could result in increased costs or liabilities, divert our management’s attention or otherwise adversely affect our business, results of operations and financial condition.”
Management's Discussion & Analysis (MD&A)
Removed heading “Merchandise Supply Chain and Tariff Pressures”
Largest changes
“Merchandise Supply Chain and Tariff Pressures”see in full comparison
“provisional tariffs may also cause supply chain issues, as companies move production from China.”see in full comparison
“301 investigations will result in additional tariffs, timing of any potential tariffs, currently unknown.”see in full comparison
“Chinese products may have several impacts on the results of our financial operations. Our costs associated with products made in China are likely to increase. These cost increases will negatively impact our results unless mitigate having tariffs, move production another county.”see in full comparison
“Inflationary Cost Pressure and High Interest Rates pressure disposable prolonged persistently high prices caused by high inflation rates, especially related to housing, groceries and fuel, as high interest rates.”see in full comparison
“The credit agreement contained various financial covenants and limitations, including the maintenance of specific financial ratios with which the Company was not in compliance as of February 1, 2025. There were no borrowings outstanding, or any outstanding letters of credit, under this credit facility fiscal year ended February the fiscal 13, Company terminated unsecured revolving line credit when it entered into a new $35.0 million asset-backed revolving line of credit (the “ABL Facility”) secured primarily by inventory and third-party credit card receivables.”see in full comparison
Full comparison: every changed paragraph (180)
Discussions items year-to-year comparisons
Tariff
Uncertainties and Pressures quantity products are made
China
Southeast Asia.
reciprocal tariffs throughout
2025.
On
20,
Supreme
Court struck down tariffs.
ruling establish refund process, uncertainty remains regarding how and when any amounts refunded.
are evaluating the ruling and any actions us.
unable estimate impact, any, uncertainties regarding the process, timing and amounts of any refunds.
On February 20, 2026, after the Supreme Court ruling, a 10% tariff under Section 122 was enacted for 150 days.
On March 11
2026, the U.S.
Trade Representative announced Section 301 investigations into various countries, including countries where much of our products are manufactured.
The extent to which these Section
301 investigations will result in additional tariffs, timing of any potential tariffs, currently unknown.
Although the tariff amounts are reduced from their levels in the second half of 2025, tariff regime beginning negatively acquisition costs in the first half of 2026 and possibly the second half of 2026.
Inflationary Cost Pressure and High Interest Rates pressure disposable prolonged persistently high prices caused by high inflation rates, especially related to housing, groceries and fuel, as high interest rates.
These high interest rates have adversely affected the availability and cost of credit for our customers, including revolving credit and auto loans, and continue to negatively impact customers’ disposable income.
Our customers’ willingness to purchase our products may continue to negatively impacted by these inflationary pressures and high interest rates.
inflation decreased, pressure disposable income adversely impacted fiscal 2024 and will likely continue to have a negative impact on consumer behavior and, by extension, our results of operations and financial condition during at least part of fiscal 2025.
Merchandise Supply Chain and Tariff Pressures
A significant amount of our merchandise is manufactured overseas, principally in Southeast Asia, and traverses Panama Canal Suez Canal.
quarter drought experienced region surrounding
Panama
Canal reduced transits approximately 37% and also reduced the permissible draft of vessels transiting the Panama Canal, which reduced the volume and number of containers carried by container ships and increased our costs.
conditions improved as the Panama
Canal authority increased the daily transits permissible draft of vessels, raising the number of transits to 95% of pre-drought operations in the second quarter and back to pre-drought levels in the third and fourth quarters. The hostilities affecting the region surrounding the Suez Canal are causing container ships to travel longer distances around the Cape of Good Hope, which is increasing lead times for merchandise and our costs to ship these goods, as well as decreasing the pool of containers available.
combination situations negatively impacted third fourth quarters impacted later shipments congestion certain Asian ports. In the third quarter, our shipments were negatively impacted by the U.S.
port strike east coast and civil unrest in some Asian countries that caused merchandise to miss its shipping windows.
Though incrementally improved fourth quarter, totality these conditions will likely continue to have a negative impact on our results and financial condition for the foreseeable future.
addition newly implemented provisional tariffs
Chinese products may have several impacts on the results of our financial operations. Our costs associated with products made in China are likely to increase. These cost increases will negatively impact our results unless mitigate having tariffs, move production another county.
Certain categories shoes handbags difficult countries.
provisional tariffs may also cause supply chain issues, as companies move production from China.
Potential supply issues products being late port congestion, longer transit times dwell times port, container ocean timeliness product deliveries, any of which may negatively impact our results of operations and financial condition.
66.7
66.3
1.0
0.7
(0.9) (2.8)
(2.8) (3.4)
Retail sales decreasedincreased by
2024. The increase in retail sales in fiscal
2025 was primarily due to a 4.5% increase in same-store sales, partially closed stores in 2025.
2023. Fiscal 2024 had 52 weeks versus 53 weeks in fiscal 2023. The decrease in retail sales in fiscal 2024 3.2% decrease same-store sales, from closed stores in week 2023.
Same-store decreasedprimarily transactions,due partiallyto offsethigher bytransactions fewer returnsvolume and slightly higher average sales per transaction. Same-store includes months.
revenues, comprised of retail sales revenue (principally finance charges and late fees customer accounts receivable, gift card breakage, shipping charges for e-commerce purchases and layaway fees), decreasedincreased by 8.2%0.6% to $653.8 million in fiscal 2025 compared to $649.8 million in fiscal 2024 compared to $708.1 million in fiscal 2023.2024. The 1,069 1,117 1,178 In fiscal 2024, the Company opened five new stores and closed 66 Other revenue, a component of total revenues, remained flat at $7.7 million in fiscal 2024 compared to fiscal 2023.2025.
In fiscal 2025, the Company opened no new stores and closed 48 stores.
revenue, revenues,
$2.7 represented
0.4%
$0.1 increase compared to fiscal 2023 credit revenue of $2.6 million or 0.4% of total revenue.
The increase in credit revenue was primarily due to increases in finance charges and late fee income as a result of receivable balances.
comprised earned private label credit card portfolio and related fee income.
Related expenses principally payroll, postage totaled
What changed in the latest 10-Q
Risk Factors
RISK FACTORS:
In addition to the other information
in this report, you should carefully
consider the factors discussed in
Part I,
“Item
1A.
Risk
Factors”
Annual
Report
Form
10-K
These risks
could materially
affect our
business, financial
condition or
future results;
however, they
are not
the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem
immaterial
materially
adversely
affect
business,
condition
results
operations.
Full comparison: every changed paragraph (2)
however, they are not the only risks we face.
however, they are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also materially adversely affect business, condition results operations.
Management's Discussion & Analysis (MD&A)
of Financial Condition and
Results of Operations
24 – 30
Full comparison: every changed paragraph (4)
of Financial Condition and Results of Operations
Results of Operations
24 – 30
21 - 27
CATO insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding CATO (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 561,950 | $1.8M | 0.0% | Added 2% |
| Yacktman Asset Management | 2026-06-30 | 105,445 | $341.6K | 0.0% | No change |
| Two Sigma Investments | 2026-06-30 | 69,915 | $197.9K | — | Sold out |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 27,047 | $87.6K | 0.0% | Reduced 21% |
| Millennium Management (Israel Englander) | 2026-06-30 | 24,800 | $80.4K | 0.0% | Reduced 48% |