UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM

QUARTERLY REPORT PURSUANTTO SECTION13 OR 15(d)OF THE SECURITIESEXCHANGEACT OF

1934

For the quarterly period ended

OR

TRANSITIONREPORT PURSUANTTO SECTION13 OR 15(d)OF THE SECURITIESEXCHANGEACT OF

1934

For the transition period from ________________to__________________

Commission file number

(Exact name of registrant as specified in itscharter)

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

,

,

(Address of principal executive offices)

(Zip Code)

(

)

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, ifchanged since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Indicateby checkmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledby Section13or15(d)oftheSecurities

Exchange Act of 1934during the preceding 12months (or for such shorterperiod that the registrantwas required to file suchreports),

and (2) has been subject to such filing requirements for the past 90 days.

X

No

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmitted

pursuant to Rule405 of RegulationS-T (§232.405of this chapter)during the preceding12 months (orfor such shorterperiod that the

registrant was required to submit such files).

X

No

Indicate bycheck markwhether theregistrant isa largeaccelerated filer,an acceleratedfiler, anon-accelerated filer,a smallerreporting

company,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreporting

company,” and “emerging growthcompany” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

☑

Smaller reporting company

Emerging growth company

Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodfor

complying with any new or revised financial accounting standards providedpursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☑

No

As ofMay 2,2026, therewere

shares of Class Acommon stockand

shares ofClass B common stockoutstanding.

1

THE CATO CORPORATION

FORM 10-Q

Quarter Ended May 2, 2026

Tableof Contents

Page No.

PARTI – FINANCIAL INFORMATION(UNAUDITED)

Item 1.

Financial Statements (Unaudited):

Condensed Consolidated Statements of Income and Comprehensive Income

2

For the Three Months EndedMay 2, 2026 and May 3, 2025

Condensed Consolidated Balance Sheets

3

At May 2, 2026 andJanuary 31, 2026

Condensed Consolidated Statements of Cash Flows

4

For the Three Months Ended May 2, 2026 andMay 3, 2025

Condensed Consolidated Statements of Stockholders’ Equity

5

For the Three Months Ended May 2, 2026 andMay 3, 2025

Notes to Condensed Consolidated Financial Statements

6 - 20

Item 2.

Management’s Discussion and Analysisof Financial Condition and Results

of Operations

21 - 27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

PARTII – OTHER INFORMATION

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29

Item 3.

Defaults Upon Senior Securities

29

Item 4.

Mine Safety Disclosures

30

Item 5.

Other Information

30

Item 6.

Exhibits

30

Signatures

31

2

PARTI FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTSOF INCOME AND

COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended

May 2, 2026

May 3, 2025

(Dollars in thousands, except per share data)

REVENUES

Retail sales

$

$

Other revenue (principally finance charges, late fees and

layaway charges)

Total revenues

COSTS AND EXPENSES, NET

Cost of goods sold (exclusive of depreciation shown below)

Selling, general and administrative (exclusive of depreciation

shown below)

Depreciation

Interest and other income, net

(1,233)

(1,202)

Costs and expenses, net

Income before income taxes

Income tax expense

Net income

$

$

Basic earnings per share

$

$

Diluted earnings per share

$

$

Comprehensive income:

Net income

$

$

Net unrealized gain (loss) on available-for-sale securities, net

of deferred income taxes of $

for each of the three months

(260)

ended May 2, 2026 and May 3, 2025

Comprehensive income

$

$

See notes to condensed consolidated financial statements (unaudited).

3

THE CATO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

May 2, 2026

January 31, 2026

(Dollars in thousands, except per share data)

ASSETS

Current Assets:

Cash and cash equivalents

$

$

Short-term investments

Restricted cash

Accounts receivable, net of allowance for customer credit losses of

$

and $

at May 2, 2026 and January 31, 2026, respectively

Merchandise inventories

Prepaid expenses and other current assets

Total Current Assets

Property and equipment – net

Other assets

Right-of-Use assets – net

Total Assets

$

$

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$

$

Accrued expenses

Accrued bonus and benefits

Current lease liability

Total Current Liabilities

Other noncurrent liabilities

Lease liability

Commitments and contingencies (Note 10)

-

-

Stockholders' Equity:

Preferred stock, $

par value per share,

shares

authorized,

issued

Class A common stock, $

par value per share,

shares authorized;

and

shares issued

at May 2, 2026 and January 31, 2026, respectively

Convertible Class B common stock, $

par value per share,

shares authorized;

shares issued at May 2, 2026 and January 31, 2026

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income

Total Stockholders' Equity

Total Liabilities and Stockholders’ Equity

$

$

See notes to condensed consolidated financial statements (unaudited).

4

THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTSOF CASH FLOWS

(UNAUDITED)

Three Months Ended

May 2, 2026

May 3, 2025

(Dollars in thousands)

Operating Activities:

Net income

$

$

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

Provision for customer credit losses

Purchase premium and premium amortization of investments

(98)

(81)

Gain on sale of assets held for investment

(34)

Share-based compensation

Gain on disposal of property and equipment

(2)

(30)

Changes in operating assets and liabilities which provided (used) cash:

Accounts receivable

(8,642)

(2,505)

Merchandise inventories

(8,794)

Prepaid and other assets

(390)

(38)

Operating lease right-of-use assets and liabilities

(221)

(156)

Accounts payable, accrued expenses and other liabilities

(878)

Net cash provided by operating activities

Investing Activities:

Expenditures for property and equipment

(1,067)

(1,019)

Purchase of short-term investments

(6,836)

(2,262)

Sales of short-term investments

Sales of other assets

Proceeds from cash value of life insurance policy

Net cash provided by investing activities

Financing Activities:

Repurchase of common stock

(311)

(935)

Proceeds from employee stock purchase plan

Net cash used in financing activities

(234)

(873)

Net increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash at beginning of period

Cash, cash equivalents, and restricted cash at end of period

$

$

Non-cash activity:

Accrued other assets and property and equipment expenditures

$

$

Accrued treasury stock

See notes to condensed consolidated financial statements (unaudited).

5

THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTSOF STOCKHOLDERS’ EQUITY

(UNAUDITED)

Accumulated

Additional

Other

Total

Common

Paid-in

Retained

Comprehensive

Stockholders'

Stock

Capital

Earnings

Income (Loss)

Equity

(Dollars in thousands)

Balance — January 31, 2026

$

$

$

$

$

Comprehensive income:

Net income

Unrealized net loss on available-for-sale securities, net of deferred

income tax benefit of $

(260)

(260)

Class A common stock sold through employee stock purchaseplan

Share-based compensation issuances and exercises

(10)

Share-based compensation expense

Repurchase and retirement of treasury shares

(4)

(307)

(311)

Balance — May 2, 2026

$

$

$

$

$

Accumulated

Additional

Other

Total

Common

Paid-in

Retained

Comprehensive

Stockholders'

Stock

Capital

Earnings

Income (Loss)

Equity

(Dollars in thousands)

Balance — February 1, 2025

$

$

$

$

$

Comprehensive income:

Net income

Unrealized net gain on available-for-sale securities, net of deferred

income tax benefit of $

Class A common stock sold through employee stock purchaseplan

Share-based compensation issuances and exercises

(2)

-

(2)

Share-based compensation expense

Repurchase and retirement of treasury shares

(10)

(897)

(907)

Other

(73)

(73)

Balance — May 3, 2025

$

$

$

$

$

See notes to condensed consolidated financial statements (unaudited).

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

6

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

7

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

8

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

9

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

10

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

11

NOTE 5 – REPORTABLE SEGMENT INFORMATION(CONTINUED):

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

12

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

13

NOTE 6 – SHARE-BASED COMPENSATION (CONTINUED):

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

14

NOTE 7– FAIR VALUE MEASUREMENTS(CONTINUED):

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

15

NOTE 7– FAIR VALUE MEASUREMENTS(CONTINUED):

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

16

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

17

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

18

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

19

THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

20

NOTE 12 – LEASES (CONTINUED):

21

THE CATO CORPORATION

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING INFORMATION:

ThefollowinginformationshouldbereadalongwiththeunauditedCondensedConsolidatedFinancial

Statements,includingtheaccompanyingNotesappearinginthisreport.Anyofthefollowingare

“forward-looking”statementswithinthemeaningofSection 27AoftheSecuritiesActof1933,as

amended,andSection 21EoftheSecuritiesExchangeActof1934,asamended:(1) statementsinthis

Form 10-Qthatreflectprojectionsorexpectationsofourfuturefinancialoreconomicperformance;

(2) statementsthatarenothistoricalinformation;(3) statementsofourbeliefs,intentions,plansand

objectives for future operations,including those contained in“Management’s Discussion andAnalysis of

Financial Condition andResults of Operations”;(4) statements relating toour operations oractivities for

ourfiscalyearendingJanuary30,2027(“fiscal2026”)andbeyond,including,butnotlimitedto,

statements regarding expectedamounts ofcapital expenditures andstore openings, relocations,remodels

and closures, statementsregarding the potentialimpact of publichealth threats andrelated responses and

mitigation efforts, as well as the potential impact of supply chain disruptions, extreme weather conditions,

tariffsandothertradepolicies,inflationarypressuresandothereconomicconditionsonourbusiness,

resultsofoperationsandfinancialconditionandstatementsregardingnewstoredevelopmentstrategy;

and(5)statementsrelatingtoourfuturerisksorcontingencies.Whenpossible,wehaveattemptedto

identifyforward-lookingstatementsbyusingwordssuchas“will,”“expects,”“anticipates,”

“approximates,” “believes,” “estimates,” “hopes,” “intends,”“may,” “plans,”“could,” “would,” “should”

andanyvariationsornegativeformationsofsuchwordsandsimilarexpressions.Wecangiveno

assurancethat actualresults oreventswill notdiffermaterially fromthoseexpressed orimplied inany

suchforward-lookingstatements.Forward-lookingstatementsincludedinthisreportarebasedon

information availableto usas ofthe filingdate ofthis report,but subjectto knownand unknownrisks,

uncertainties and other factors that could cause actual resultsto differ materially from those contemplated

by the forward-looking statements.Such factors include, but are not limited to, the following:any actual

or perceiveddeterioration inthe conditionsthat driveconsumer confidenceand spending,including, but

notlimitedto,prevailingsocial,economic,politicalandpublichealththreatsanduncertainties,waror

similarhostilitiesandtheircollateraleffects,levelsofunemployment,fuel,energyandfoodcosts,

inflation,wagerates,taxrates,interestrates,homevalues,consumernetworthandtheavailabilityof

credit;changesinlaws,regulationsorgovernmentpoliciesaffectingourbusiness,includingbutnot

limited totariffsand taxes;uncertainties regardingthe impactofany governmentalaction regarding,or

responsesto,theforegoingconditions;competitivefactorsandpricingpressures;ourabilitytopredict

and respondto rapidlychanging fashiontrends andconsumer demands;our abilityto successfullyopen

new stores in attractive locations andthe ability of any such newstores to grow and perform asexpected;

underperformance orotherfactorsthatmay leadtoacontinuationoraccelerationofstoreclosuresand

negativelyaffecttheCompany’sprofitability,financialconditionorprospects;adverseweather,public

healththreats, actsofwar oraggressionorsimilarconditions andrelated consequencesthatmay affect

our salesor operations;inventory risksdue toshifts inmarket demand,including theability toliquidate

excessinventoryatanticipatedmargins;adversedevelopmentsorvolatilityaffectingthefinancial

services industry or broaderfinancial markets; and otherfactors discussed under “Risk Factors”in Part I,

Item1AoftheCompany’sAnnualReportonForm10-KforthefiscalyearendedJanuary31,2026

(“fiscal 2025”), as amended or supplemented, and in other reportswe file with or furnish to theSecurities

and Exchange Commission (“SEC”) fromtime to time.Wedo not undertake, and expresslydecline, any

obligation to update any suchforward-looking information contained in this report,whether as a result of

new information, future events, or otherwise.

THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS(CONTINUED)

22

CRITICAL ACCOUNTING POLICIES AND ESTIMATES:

TheCompany’scriticalaccountingpoliciesandestimatesaremorefullydescribedin“Management’s

DiscussionandAnalysisofFinancialConditionandResultsofOperations”inPartII,Item7inthe

Company’s Annual Report onForm 10-K for thefiscal year ended January31, 2026. The preparationof the

Company’sfinancialstatements inconformitywithgenerallyaccepted accountingprinciples intheUnited

States (“GAAP”) requires management to make estimates and assumptions about future events that affect the

amounts reported in thefinancial statements and accompanyingnotes. Future eventsand their effects cannot

bedeterminedwithabsolutecertainty.Therefore,thedeterminationofestimatesrequirestheexerciseof

judgment. Actual resultsinevitably will differfrom those estimates,and such differencesmay be materialto

thefinancialstatements.Themostsignificantaccountingestimatesinherentinthepreparationofthe

Company’s financialstatements includethe calculationof potentialasset impairment,income taxvaluation

allowances,reservesrelatingtoself-insuredhealthinsurance,workers’compensation,generalandauto

insuranceliabilities,uncertaintaxpositions,theallowanceforcustomercreditlosses,andinventory

shrinkage.

The Company’s critical accounting policies andestimates are discussed with the Audit Committee.

THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS(CONTINUED)

23

RESULTS OF OPERATIONS:

The following table sets forth, for the periods indicated, certain items inthe Company's unaudited Condensed

Consolidated Statements of Income as apercentage of total retail sales:

Three Months Ended

May 2, 2026

May 3, 2025

Total retail sales

100.0

%

100.0

%

Other revenue

1.0

1.1

Total revenues

101.0

101.1

Cost of goods sold (exclusive of depreciation)

62.8

64.9

Selling, general and administrative (exclusive of depreciation)

31.8

32.8

Depreciation

1.3

1.5

Interest and other income

(0.7)

(0.7)

Income before income taxes

5.8

2.5

Net income

5.5

2.0

THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS(CONTINUED)

24

RESULTS OF OPERATIONS(CONTINUED):

Management’sDiscussion andAnalysis ofFinancial Conditionand Resultsof Operations(“MD&A”) is

intendedtoprovideinformationtoassistreadersinbetterunderstandingandevaluatingourfinancial

conditionandresultsofoperations.WerecommendreadingthisMD&Ainconjunctionwithour

CondensedConsolidatedFinancialStatementsandtheNotestothosestatementsincludedinthe

“Financial Statements”section ofthis QuarterlyReport onForm 10-Q,as wellas ourAnnual Reporton

Form 10-K for fiscal 2025.

Recent Developments

Tariff Issues

There remains asignificant degree ofuncertainty regarding thestatus of U.S.trade policy andthe types and

amount of tariffs towhich the Company willbe subject.On February 20, 2026,the Supreme Court issueda

rulingthatstruckdowntheseriesoftariffsthathadbeenimposedundertheInternationalEconomic

Emergency Powers Act (“IEEPA”) beginning in February2025.In response, the administration transitioned

underSection122oftheTradeActof1974(the“TradeAct”)toanew10%baselineglobaltariffthatis

scheduled to expire in July 2026 unless otherwise extended by Congress.On May 7, 2026, the U.S. Court of

InternationalTradeissuedarulingfindingthattheseSection122tariffsareunlawful,butlimitedits

permanent injunction tothe specific plaintiffsin that case,and these tariffscontinue to becollected from all

otherimporters,includingtheCompany.Theadministrationhasappealedthisdecision,anditremains

uncertain whether these duties will remainin effect or possibly be replacedby other tariffs.

On March 11, 2026, the U.S. TradeRepresentative announced investigations under Section 301of the Trade

Actintovariouscountries,includingcountrieswheremuchofourproductsaremanufactured,thatcould

resultintheimpositionofincreasedtariffs.BeginninginMay2026,theU.S.TradeRepresentativeheld

Section 301hearings forcertain countries,including countrieswhere wesource mostof ourproduct.The

extent to whichthese hearings willresult in increasedtariffs is currentlyunknown.Our acquisition costsin

future periods willbe negatively impactedto the extentthat any tariffsimposed due toSection 301 findings

are greater than the currentSection 122 tariffs.

InApril2026,followingtheSupremeCourt’sinvalidationoftheIEEPAtariffsandtheestablishmentof

procedures for processingtariff refunds, theCompany submitted arefund claim andrecorded a $5.7million

reduction in cost of goods sold in the first quarter of fiscal 2026.On May 15, 2026, the Company received a

$2.6 millionpartial paymentfor itstariff refundclaim. TheCompany anticipatesreceiving paymentfor the

balance of its tariff refund claimby the end of the secondquarter of fiscal 2026.

PricingPressures

The pressureon ourcustomers’ discretionaryincome continuedin thefirst quarterof 2026with increasing

fuelprices.Additionally,theCorePriceIndex(CPI)roseinApril,furtherpressuringourcustomers’

discretionary income both now and into the foreseeable future.We believe these additional pricing pressures

will causeourcustomers tobemorecautiouswith theirdiscretionaryspending.In addition,our abilityto

pass through costscaused by risingfuel prices andpotential increased tariffcosts will belimited due inpart

to the pressure on our customers’ discretionary spending.

THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS(CONTINUED)

25

Comparison of First Quarter of 2026with 2025

Total retail sales for the first quarterwere $169.4 million compared tolast year’s first quarter sales of$168.4

million.Sales increased dueto a same-storesales increase of3%, partially offsetby stores thatwere closed

in the past 12 months.Same store sales include storesthat have been open more than15 months.Stores that

have beenrelocated orexpanded arealso includedin thesame storesales calculationafter theyhave been

open more than 15 months.The method of calculating same store sales varies across the retail industry.As a

result, our samestore sales calculationmay not becomparable to similarlytitled measures reportedby other

companies. E-commerce sales were less than 4.0%of sales for the first quarter offiscal 2026 and are included

in thesame-store salescalculation.Total revenues,comprised ofretail salesand otherrevenue (principally

financechargesandlatefeesoncustomeraccountsreceivable,shippingchargedtocustomersfore-

commercepurchasesandlayawayfees),were$171.1millionforthefirstquarterendedMay2,2026,

compared to $170.2million forthe firstquarter ended May3, 2025. TheCompany operated1,065 storesat

May 2, 2026 comparedto 1,109 stores atthe end of last fiscalyear’s first quarter.For the first threemonths

offiscal2026,theCompanyopenedtwostoresandclosedsixstores.TheCompanycurrentlyexpectsto

open up to 15 new storesand close approximately 35 stores infiscal 2026.

Other revenue, a component oftotal revenues, was $1.7 million for the firstquarter of fiscal 2026, compared

to $1.8million forthe prioryear’s comparablefirst quarter.Included inOther revenueis creditrevenue of

$0.7 millionwhich represented0.4% oftotal revenuesin thefirst quarterof fiscal2026, flatboth indollars

and percentage comparedto 2025.Credit revenue is comprisedof interest earned onthe Company’s private

label credit cardportfolio and relatedfee income.Related expenses includeprincipally payroll, postageand

other administrative expenses,and totaled $0.4million in thefirst quarter of2026, flat tothe first quarterof

2025.

Cost of goodssold was $106.3million, or 62.8%of retail sales forthe first quarter offiscal 2026, compared

to $109.3million, or64.9% ofretail salesin thefirst quarterof fiscal2025.The decreasein costof goods

sold asa percentof saleswas duein partto apre-tax tariffrefund claimof $5.7million andlower freight

costs,partiallyoffsetbyincreasedsalesofmarkeddowngoods.Costofgoodssoldincludesmerchandise

costs(netofdiscountsandallowances),buyingcosts,distributioncosts,occupancycosts,freightand

inventory shrinkage.Net merchandise costs andin-bound freight are capitalizedas inventory costs.Buying

anddistributioncostsincludepayroll,payroll-relatedcostsandoperatingexpensesforthebuying

departments and distribution center.Occupancy costs include rent, real estate taxes, insurance, common area

maintenance, utilities and maintenance for storesand distribution facilities.Total gross margin dollars (retail

sales less cost of goods sold exclusive of depreciation) increased by 6.8% to $63.1 million for the first quarter

of fiscal2026 comparedto $59.1million in thefirst quarterof fiscal2025.Gross marginas presentedmay

not be comparable to those ofother entities.

Selling, general and administrative expenses (“SG&A”) primarily include corporate and store payroll, related

payroll taxes and benefits, insurance, supplies, advertising,and bank and credit card processing fees.SG&A

expenses were$53.9 million,or 31.8%of retailsales forthe firstquarter offiscal 2026,compared to$55.3

million,or32.8%ofretailsalesinthefirstquarteroffiscal2025.SG&Aexpensewaslowerinthefirst

quarter offiscal 2026compared tothe firstquarter offiscal 2025primarily dueto lowercorporate payroll

expense, insurance costs andequipment maintenance, partially offsetby increases in incentive compensation

expense.

THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS(CONTINUED)

26

Depreciation expense was $2.2 million, or 1.3% of retail sales for the first quarter of fiscal 2026, compared to

$2.6 million, or1.5% of retailsales for thefirst quarter offiscal 2025. Thedecrease in depreciationexpense

was due to fully depreciated olderstores.

Interestandotherincomewas$1.2million,or0.7%ofretailsalesforthefirstquarteroffiscal2026,

compared to $1.2 million, or 0.7% ofretail sales for the firstquarter of fiscal 2025.

Income tax expensewas $0.5 million or0.3% of retail salesfor the first quarterof fiscal 2026, compared

toincometaxexpenseof$0.9million,or0.6%ofretailsalesforthefirstquarteroffiscal2025.The

effectiveincometaxrateforthefirstquarteroffiscal2026was5.3%comparedto21.9%forthefirst

quarter of fiscal 2025. The decrease in tax expense was primarily due to lowerforeign income taxes.

LIQUIDITY, CAPITALRESOURCESAND MARKETRISK:

The Companybelieves thatits cash,cash equivalentsand short-terminvestments, togetherwith cashflows

from operations and its asset-backed revolving line of credit, will be adequate to fund the Company’sregular

operatingrequirementsand expectedcapital expendituresfor thenext12monthsfrom theissuance ofthis

quarterly report on Form 10-Q.

Cashprovidedbyoperatingactivitiesforthefirstthreemonthsoffiscal2026wasprimarilygeneratedby

earningsadjustedfordepreciationandchangesinworkingcapital.Theincreaseincashprovidedof$4.2

millionforthefirstthreemonthsoffiscal2026ascomparedtothefirstthreemonthsoffiscal2025was

primarily attributable tohigher net incomeand the relativechange in accountspayable from year-endto the

first quarterfor bothyears, partiallyoffset byan increasein accountsreceivable andthe relativechange in

inventory from year-end to the firstquarter for both years.

At May 2, 2026, the Company had working capital of $49.0 million compared to $37.4 million at January 31,

2026.Theincreasewasprimarilyattributabletoanincreaseincash,inventoryandaccountsreceivable,

partially offset by higher accounts payable.

The ABLCredit Agreement(“ABL Facility”)of upto$35.0 millionis committedthrough March2028

and is secured primarily by inventory andthird-party credit card receivables. The proceeds from theABL

Facilitymaybeusedtoprovidefundingforongoingworkingcapitalandgeneralcorporatepurposes.

Therewerenoborrowingsoutstandingandtheavailabilityunderthefacilitywas$30.0millionbefore

givingeffecttoa$3.0millionoutstandingletterofcreditthatreducedborrowingavailabilityto$27.0

millionasofMay2,2026andJanuary31,2026.Theweightedaverageinterestrateunderthecredit

facility was zero at May 2, 2026 and January 31, 2026 due to no outstandingborrowings.

Expendituresforpropertyandequipmenttotaled$1.1millioninthefirstthreemonthsoffiscal2026,

compared to $1.0million in lastfiscal year’s firstthree months.For the fullfiscal 2026 year,the Company

expects to invest approximately $7.4 million incapital expenditures.

Netcashprovidedbyinvestingactivitiestotaled$0.8millioninthefirstthreemonthsoffiscal2026

compared to $7.9million provided inthe comparable periodof fiscal 2025.The decrease wasprimarily due

to an increase in purchases of short-terminvestments, partially offset by adecrease in the sales ofshort-term

investments.

THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS(CONTINUED)

27

Net cash used infinancing activities totaled $0.2million in the firstthree months of fiscal2026 compared to

$0.9

m

illion used in the comparable period of fiscal 2025. The decreasewas primarilydue tolower stock

repurchases.

The Company purchased107,823 shares inthe first quarterof 2026.As of May2, 2026, theCompany had

572,917 shares remaining in openauthorizations under its share repurchase program.

The Company does not usederivative financial instruments.

TheCompany’s investmentportfoliowasprimarily investedin corporatebondsheld inmanaged accounts

withunderlyingratingsofAorbetteratMay2,2026andJanuary31,2026.Thecorporatebondshave

contractual maturities which range from 13 daysto 2.9 years.

Additionally,atMay2,2026,theCompanyhaddeferredcompensationplanassetsof$9.8million.At

January31,2026,theCompanyhaddeferredcompensationplanassetsof$9.7million.Theseassetsare

recordedwithinOtherassetsintheCondensedConsolidatedBalanceSheets.SeeNote7,FairValue

Measurements.

RECENT ACCOUNTING PRONOUNCEMENTS:

See Note 8, Recent Accounting Pronouncements.

THE CATO CORPORATION

QUANTITATIVEAND QUALITATIVEDISCLOSURES ABOUT MARKET RISK

28

ITEM 3. QUANTITATIVEAND QUALITATIVEDISCLOSURES ABOUT MARKET RISK:

TheCompanyissubjecttomarketrateriskfromexposuretochangesininterestratesrelatedtoits

financing, investing andcash management activities,but the Companydoes notbelieve such exposureis

material.

ITEM 4. CONTROLS AND PROCEDURES:

We carried out an evaluation, with theparticipation of our Principal Executive Officer andPrincipal Financial

Officer,oftheeffectivenessofourdisclosurecontrolsandproceduresasofMay2,2026.Basedonthis

evaluation, our Principal Executive Officer and PrincipalFinancial Officer concluded that, as of May2, 2026,

our disclosurecontrols andprocedures, asdefined inRule 13a-15(e),under theSecurities ExchangeAct of

1934(the“ExchangeAct”),wereeffectivetoensurethatinformationwearerequiredtodiscloseinthe

reportsthatwefileorsubmitundertheExchangeActisrecorded,processed,summarizedandreported

within the time periodsspecified in the SEC’srules and forms andthat such information isaccumulated and

communicated to our management, including our Principal Executive Officer and Principal Financial Officer,

as appropriate to allow timely decisionsregarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING:

No change in the Company’s internal controlover financial reporting (as defined inExchange Act Rule 13a-

15(f)) has occurred during the Company’s fiscal quarter ended May 2, 2026 that hasmaterially affected, or is

reasonablylikelytomateriallyaffect,theCompany’sinternalcontroloverfinancialreporting.

THE CATO CORPORATION

PARTII OTHERINFORMATION

29

ITEM 1.LEGAL PROCEEDINGS:

Not Applicable

ITEM 1A.RISK FACTORS:

In addition to the other informationin this report, you should carefullyconsider the factors discussed inPart I,

“Item1A.RiskFactors”inourAnnualReportonForm10-KforourfiscalyearendedJanuary31,2026.

These riskscould materiallyaffect ourbusiness, financialcondition orfuture results;however, theyare not

the only risks we face.Additional risks and uncertainties not currently known tous or that we currently deem

tobeimmaterialmayalsomateriallyadverselyaffectourbusiness,financialconditionorresultsof

operations.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIESAND USE OF PROCEEDS:

The following table summarizes the Company’s purchases of its common stock for the three months

ended May 2, 2026:

ISSUER PURCHASES OF EQUITY SECURITIES

Total Number of

Maximum Number

Shares Purchased as

(or Approximate Dollar

Total Number

Average

Part of Publicly

Value)of Shares that may

of Shares

Price Paid

Announced Plans or

Yet be PurchasedUnder

Period

Purchased

per Share (1)

Programs (2)

The Plans or Programs (2)

February 2026

-

$

-

-

March 2026

62,599

2.85

62,599

April 2026

45,224

2.86

45,224

Total

107,823

$

2.85

107,823

572,917

(1)

Prices include trading costs.

(2)

As of January31, 2026, theCompany’s sharerepurchase program had680,740 shares remaining

inopen authorizations.DuringthefirstquarterendedMay2,2026,theCompany repurchased

and retired107,823 shares underthis programfor approximately$307,697 oran averagemarket

price of $2.85 per share.As of May 2, 2026, the Company had 572,917 shares remaining in open

authorizations.There is no specified expiration date for the Company’s repurchase program.

ITEM 3.DEFAULTSUPON SENIOR SECURITIES:

Not Applicable

THE CATO CORPORATION

PARTII OTHERINFORMATION

30

ITEM 4.MINE SAFETY DISCLOSURES:

No matters requiring disclosure.

ITEM 5.OTHER INFORMATION:

During thethree monthsended May2, 2026,none ofthe Company’sdirectors orofficers (asdefined in

Rule 16a-1(f) of theSecurities Exchange Act of 1934,as amended)

or

a “Rule10b5-1

trading arrangement” ora “

trading arrangement” (assuch terms aredefined in Item408

of Regulation S-K).

ITEM 6.EXHIBITS:

Exhibit No.

Item

3.1

3.2

31.1*

31.2*

32.1*

32.2*

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation LinkbaseDocument

101.DEF

Inline XBRL Taxonomy Extension Definitions LinkbaseDocument

101.LAB

Inline XBRL Taxonomy Extension LabelLinkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation LinkbaseDocument

104.1

CoverPageInteractiveDataFile(FormattedinInlineXBRLand

contained in the Interactive Data Files submitted as Exhibit 101.1*)

* Submitted electronically herewith.

THE CATO CORPORATION

PARTII OTHERINFORMATION

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, theRegistrant has duly caused this

report to be signed on its behalf by the undersigned thereunto dulyauthorized.

THE CATOCORPORATION

May 28, 2026

/s/ John P.D. Cato

Date

John P.D. Cato

Chairman, President and

Chief Executive Officer

May 28, 2026

/s/ Charles D. Knight

Date

Charles D. Knight

Executive Vice President

Chief Financial Officer