The Cato (CATO) investor relations material

Executive summary

• Reported a net loss of $10.7 million ($0.55 per diluted share) for Q4 2025, improving from a $14.1 million loss ($0.74 per share) in Q4 2024.

• Full-year 2025 net loss was $5.9 million ($0.31 per share), a significant improvement from a $18.1 million loss ($0.97 per share) in 2024.

• Fiscal 2025 sales increased 0.7% year-over-year to $646.8 million, with same-store sales up 4%.

Financial highlights

• Q4 2025 sales were $150.0 million, down 3.4% from Q4 2024; same-store sales were flat.

• Gross margin for Q4 rose to 29.2% from 28.0% year-over-year; full-year gross margin increased to 33.3% from 32.0%.

• SG&A expenses decreased $1.9 million in Q4 and $5.0 million for the year; SG&A as a percent of sales was 37.9% in Q4 and 35.0% for the year.

• Income tax benefit of $1.1 million in Q4 and $1.6 million for the year, compared to expenses in the prior year.

Outlook and guidance

• Focus for 2026 includes improving merchandise assortment, leveraging technology investments, and maintaining customer service.

• 2026 outlook is cautious due to economic uncertainties and pressure on customer disposable income.

• Plans to open up to 10 new stores and close up to 40 underperforming stores in 2026; closures expected to have minimal financial impact.