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Aug 02
Cato Corp-Class A Q2 2025 Earnings Report
Cato Corp-Class A reported a strong rebound in Q2 2025, driven by higher same-store sales and improved expense management.
Key Takeaways
Cato Corp delivered a solid Q2 2025 performance with net income rising significantly to $6.8 million. Sales increased 5% YoY, boosted by a 9% same-store sales uptick. Cost control measures led to improved gross and operating margins.
Net income rose to $6.8M from $95K YoY.
Sales reached $174.7M, up 5% YoY due to 9% same-store sales growth.
Gross margin improved to 36.2% from 34.6% last year.
SG&A expenses decreased as a percent of sales, driven by lower payroll and insurance costs.
Cato Corp-Class A
Cato Corp-Class A
Forward Guidance
The company expects the remainder of 2025 to be challenging due to continued uncertainty surrounding tariffs and their potential impact on product acquisition costs.
Positive Outlook
- Improving sales trend in Q2 2025
- 9% same-store sales growth
- Expense management contributing to margin improvement
- Gross margin improved despite lower merchandise margins
- Year-to-date SG&A as percent of sales decreased
Challenges Ahead
- Ongoing uncertainty related to tariffs
- Potential increase in product acquisition costs
- Higher advertising and corporate expenses
- Continued impact of store closures on sales
- Macroeconomic factors affecting consumer spending