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• Old Navy for women's fashion.
• Kohl's for women's apparel.

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• Women's Apparel: The company offers a wide range of women's clothing, including dresses, suits, sportswear, outerwear, and intimate apparel.
• Fashion Accessories: Cato also sells various accessories to complement its apparel, such as jewelry, handbags, shoes, belts, and scarves.

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The Cato Corporation (symbol: CATO) sells primarily to individuals through its chain of retail stores and e-commerce platforms. Therefore, it does not have major corporate customers.

The company serves the following categories of individual customers:

• Value-conscious women: Customers who prioritize affordability and seek fashionable apparel and accessories at accessible price points for everyday wear and special occasions.
• Women seeking current fashion trends: Customers interested in keeping up with contemporary styles in clothing, shoes, and accessories.
• Plus-size women: A significant segment of their customer base, served by Cato's extensive offering of plus-size apparel that combines fashion with a comfortable fit.

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John P. Derham Cato
Chairman, President and Chief Executive Officer

Mr. Cato has served as Chairman, President, and Chief Executive Officer of The Cato Corporation since 2004, having been CEO since 1999 and President since 1997. He has been an officer of the company since 1981 and a Director since 1986. His previous roles include President, Vice Chairman and Chief Executive Officer (1999-2004), President, Vice Chairman and Chief Operating Officer (1997-1999), and Vice Chairman and Chief Operating Officer (1996-1997). From 1989 to 1996, he managed the company's off-price division, serving as Executive Vice President and as President and General Manager of the It's Fashion! Division from 1993 to 1996. Mr. Cato previously served as a Director at Harris Teeter Supermarkets. The Cato Corporation was co-founded by his father, Wayland H. Cato, Jr., in 1946.

Charles D. Knight
Executive Vice President and Chief Financial Officer

Mr. Knight was appointed Executive Vice President, Chief Financial Officer of The Cato Corporation in January 2022. Before joining Cato, he served as Vice President and Chief Financial Officer at The Vitamin Shoppe from 2019 to 2020. His experience also includes roles as Senior Vice President and Chief Accounting Officer from 2018 to 2019, and Senior Vice President and Corporate Controller from 2010 to 2018, both at The Vitamin Shoppe.

Gordon Smith
Executive Vice President, Chief Real Estate and Store Development Officer

Mr. Smith has held the position of Executive Vice President and Chief Real Estate and Store Development Officer since July 2011. He began his career with The Cato Corporation in 1989. Prior to his current role, he served as Senior Vice President of Real Estate from 2008 to 2011 and as Assistant Vice President of Corporate Real Estate from 1989 to 2008.

Jeffrey Shock
Senior Vice President & Controller

Mr. Shock serves as the Senior Vice President and Controller of The Cato Corporation.

Stephen Headley
Senior Vice President of Sourcing & MDSE Support

Mr. Headley serves as the Senior Vice President of Sourcing and Merchandise Support at The Cato Corporation.

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1. Economic Volatility and Declining Consumer Spending: The most prominent risk stems from economic downturns, inflation, and fluctuating consumer discretionary spending. These factors directly impact sales and profitability in the apparel retail sector. Cato has experienced consistent sales decreases and net losses in recent fiscal years, with revenue struggling to surpass pre-pandemic levels. This pressure on consumer spending also makes it difficult for the company to liquidate excess inventory at anticipated margins.
2. Intense Competition and Failure to Adapt to the Evolving Retail Landscape: The retail industry is highly competitive, characterized by aggressive price competition and promotional activities that squeeze margins and market share. Cato has struggled to adapt to the shift towards e-commerce and faces stiff competition from larger retailers and online platforms, lacking a strong online presence and brand visibility. The company's inability to keep pace with changing consumer behaviors, such as the demand for online reviews and robust e-commerce options, further erodes its competitiveness and profitability.
3. Significant Operating Lease Liabilities and Cash Burn: Despite having no funded debt, Cato carries substantial operating lease liabilities that significantly outweigh its cash and short-term investments. These lease obligations are a considerable drain on the company's cash flow, contributing to a rapid decline in its cash balance and raising concerns about its long-term financial stability. Analysts have characterized these liabilities as a major factor contributing to the company's "value trap" status.

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The rise of ultra-fast fashion e-commerce giants like Shein and Temu presents a significant emerging threat. These companies leverage a direct-to-consumer model with highly optimized digital supply chains to deliver an enormous volume of trendy, extremely low-priced apparel to value-conscious consumers globally, often bypassing traditional retail infrastructure and its associated overhead. This model fundamentally challenges Cato's value proposition and ability to compete on price, speed-to-market for new styles, and convenience within the budget apparel segment.

Additionally, the increasing mainstream adoption and sophistication of online resale marketplaces (e.g., Poshmark, ThredUp) constitute another emerging threat. These platforms offer convenient and affordable access to second-hand clothing, appealing to value-conscious consumers and those seeking sustainable fashion options. As these marketplaces grow and gain social acceptance, they directly compete for the discretionary spending of Cato's target demographic, providing an alternative source for inexpensive apparel without the need to purchase new items.

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• Women's Apparel Market (U.S.): The U.S. women's apparel market was valued at $291.6 billion in 2023 and is projected to reach $390.5 billion by 2032, with a compound annual growth rate (CAGR) of 3.3%. Another estimate projects the U.S. women's apparel market to be more than $153 billion from 2024 to 2029.
• Fashion Accessories Market (U.S.): The U.S. fashion accessories market was valued at USD 223.2 billion in 2024 and is expected to reach approximately USD 477.4 billion by 2034, growing at a CAGR of 7.9% from 2025 to 2034. Another report valued the U.S. market at USD 254.48 billion in 2024, with a projection to reach USD 505.69 billion by 2033 at a CAGR of 7.89% during the forecast period of 2025-2033.
• Plus-Size Women's Clothing Market (U.S.): The plus-size women's clothing market is expected to reach $32.3 billion by 2025.

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The Cato Corporation (CATO) is expected to drive future revenue growth over the next 2-3 years through several key initiatives:

1. Enhanced Merchandise Mix and Same-Store Sales Growth: The company aims to boost revenue by consistently refreshing its merchandise to align with current fashion trends and consumer preferences. This strategy is critical for driving stronger performance in existing stores, as evidenced by a 9% same-store sales increase contributing to a 5% overall sales rise in Q2 2025.
2. Expansion of E-commerce Capabilities: Cato is focusing on improving its online shopping experience and enhancing its digital presence. This e-commerce development is a strategic initiative intended to reach a broader customer base and significantly influence future revenue generation.
3. Selective Physical Store Expansion: Despite recent store closures, The Cato Corporation's strategic objectives include expanding its market presence through new store openings. This involves exploring opportunities to establish a physical presence in underserved markets, indicating a targeted approach to growth in profitable locations.
4. Strategic Partnerships: Collaborations with complementary businesses or influencers are identified as a potential avenue to open new revenue streams and expand the company's market reach.

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Share Repurchases

• On February 24, 2022, The Cato Corporation's Board of Directors authorized a 1,000,000 share increase in its share repurchase program. At that time, approximately 379,000 shares remained from previous open authorizations.
• An additional 1,000,000 share increase in the repurchase program was authorized by the Board of Directors on December 23, 2024.
• Between year-end and March 31, 2025, the company repurchased 264,282 shares for $828,181. As of February 1, 2025, there were 997,455 shares remaining under open authorizations, with no specified expiration date.

Capital Expenditures

• The Cato Corporation's capital expenditures were $8.7 million for fiscal 2024.
• In the last 12 months (as of late 2024/early 2025), capital expenditures amounted to -$5.44 million.
• For 2025, the company intends to open up to 15 new stores and close up to 50 underperforming locations, which involves capital expenditures focused on store development and improvements.