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CATO CORP (CATO)·Q3 2025 Earnings Summary

Executive Summary

  • Primary-source Q3 2025 earnings materials (8‑K 2.02 press release and earnings call transcript) were not available on Cato’s IR site or via our document catalog as of this review; therefore, Q3 2025 results could not be verified from primary sources [Search: no Q3 2025 press release found].
  • Trajectory into Q3 followed a strong Q2: sales $174.7M, net income $6.8M ($0.35 diluted EPS), same‑store sales +9%, gross margin 36.2% vs 34.6% YoY, while management cautioned that H2 2025 would be challenging due to tariff uncertainty .
  • Prior comparable quarter (Q3 2024) was weak: sales $144.6M, net loss ($15.1M), same‑store sales −3%, gross margin 28.8% vs 32.5% in Q3 2023; dividend was suspended in November 2024 amid pressure on demand and costs .
  • Consensus estimates for Q3 2025 from S&P Global were unavailable for this review (SPGI request limit exceeded); where estimates are required, note they are unavailable.

What Went Well and What Went Wrong

What Went Well

  • Q2 momentum: same‑store sales +9% drove sales +5% YoY to $174.7M and EPS to $0.35; gross margin expanded to 36.2% on lower distribution/buying costs .
  • SG&A efficiency: SG&A as a percent of sales decreased to 32.8% in Q2 (vs 34.9% prior year), with lower payroll and insurance costs .
  • Management tone on execution: “We will continue to tightly manage our expenses as we anticipate the back half of 2025 to be challenging due to the continued uncertainty regarding tariffs…” — John Cato, CEO .

What Went Wrong

  • Prior year’s Q3 baseline was weak: Q3 2024 sales fell to $144.6M (−8% YoY), same‑store sales −3%, gross margin compressed to 28.8% (from 32.5% prior year), and net loss widened to ($15.1M), reflecting weather, supply chain and cost pressures .
  • Structural footprint pressure: 62 stores closed in FY2024; store count fell to 1,117 by FY‑end, with plans to close up to 50 underperforming locations in 2025 as leases expire .
  • Distribution/freight and occupancy deleverage were persistent 2024 headwinds impacting margins into 2025 planning .

Financial Results

Note: Q3 2025 primary results were not located; tables include available prior periods and prior-year comparable quarter for context.

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$144.6 $170.2 $176.5 Not available [Search: no Q3 2025 press release found]
Net Income ($USD Millions)($15.1) $3.3 $6.8 Not available [Search: no Q3 2025 press release found]
Diluted EPS ($USD)($0.79) $0.17 $0.35 Not available [Search: no Q3 2025 press release found]
Gross Margin (%)28.8% 35.1% 36.2% Not available [Search: no Q3 2025 press release found]
Same‑Store Sales (%)−3% Flat +9% Not available [Search: no Q3 2025 press release found]

KPIs (selected, where disclosed):

KPIQ3 2024Q1 2025Q2 2025Q3 2025
Store Count (period end)1,167 1,109 1,101 Not available [Search: no Q3 2025 press release found]
SG&A (% of Sales)40.0% 32.8% 32.8% Not available [Search: no Q3 2025 press release found]

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company guidanceFY2025/Q3 2025Not provided in prior releasesNot available (no Q3 2025 PR located)N/A
DividendOngoingRegular quarterly dividend (pre‑Nov 2024)Dividend suspended (Nov 21, 2024)Lowered

Management has historically not provided quantitative revenue/margin/OpEx guidance in the press releases reviewed; the most recent directional commentary emphasized expense control and tariff uncertainty heading into H2 2025 .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was available for review (not found in our document catalog). Trend analysis uses Q1 and Q2 2025 commentary and prior-year Q3 press release for context.

TopicPrevious Mentions (Q1 2025; Q2 2025)Current Period (Q3 2025)Trend
Tariffs/macroCautious outlook given proposed tariffs and pressure on discretionary spending Not available (primary Q3 2025 doc absent)Continued caution likely
Supply chain/DC efficiencyQ4 2024 noted DC automation conversion issues; improvement by Q4; Q2 2025 gross margin aided by lower distribution/buying costs Not availableImproving trajectory into H2 pre‑Q3
SG&A disciplineSG&A % down in Q2; payroll/insurance savings Not availableOngoing cost control focus
Store optimizationPlanned openings/closures; Q1 closed 8 stores; Q2 closed 8; FY2024 closed 62; plan to close up to 50 in 2025 Not availableFootprint rationalization continues

Management Commentary

  • “Our sales trend continued to improve during the second quarter… We will continue to tightly manage our expenses as we anticipate the back half of 2025 to be challenging due to the continued uncertainty regarding tariffs…” — John Cato, Chairman, President & CEO .
  • “Our fiscal 2024 sales trend was negatively impacted by continued pressure on our customers’ discretionary spending levels… Our fourth quarter sales trend improved compared to our full year and third quarter sales trend.” — John Cato .
  • “In 2025, we will continue our focus on reducing expenses… We also expect expense reductions… including reductions in our distribution and domestic freight expenses.” — John Cato .

Q&A Highlights

A Q3 2025 earnings call transcript was not available in our sources; therefore, Q&A themes and clarifications cannot be verified for the current quarter [ListDocuments: no earnings-call-transcript for CATO; Search: no matches].

Estimates Context

  • Wall Street consensus estimates for Q3 2025 (EPS and revenue) via S&P Global were unavailable due to access limits at the time of this review. Where estimate comparisons would ordinarily be presented, note that they are unavailable from S&P Global for Q3 2025 for this analysis.

Key Takeaways for Investors

  • Verification gap: Primary Q3 2025 results were not accessible; await the 8‑K 2.02 press release and/or IR posting to validate EPS, sales, margin, and any operational updates [Search: no Q3 2025 press release found].
  • Near-term watch: Given Q2 margin gains from lower distribution/buying costs and ongoing SG&A discipline, monitor whether these efficiencies carried into Q3 amid tariff uncertainty and footprint rationalization .
  • Demand sensitivity: 2024’s weak Q3 baseline underscores sensitivity to macro/weather/supply chain; watch same‑store sales trajectory in Q3 2025 given Q2’s +9% comp improvement .
  • Footprint and costs: Continued store closures and targeted openings should support SG&A/freight/distribution leverage; track store count, lease liabilities, and right‑of‑use assets trends in upcoming filings .
  • Dividend posture: Dividend remains suspended since Nov 2024; any reinstatement would be a notable signal of confidence in cash flow stability .
  • Action: Hold off on definitive Q3 judgments until primary results post; focus on margin direction, comp sales, and inventory quality (markdown intensity) as key drivers of near‑term stock reaction once results are available .

Sources reviewed in full: Q2 2025 press release ; Q1 2025 press release ; FY/Q4 2024 press release . Additional context: Cato IR news archive and Q3 2024 press release .