Cato Corporation To Close ~70 Additional Underperforming Stores In Q3 And Q4; Brings FY26 Total Planned Stores Closures To ~120; Sees $1M-$1.3M In Associated Costs

The Company expects to incur between $1.0 million and $1.3 million in costs to exit these additional stores through the end of 2026. These costs relate primarily to expenses for the disposal of external signage and fixtures and returning store systems back to corporate. As these stores are all at the end of their lease term, the Company will not be paying rent for these locations beyond 2026.

"Annually we review approximately one-third of our stores to exercise available lease options or negotiate an extension based on each store's performance including store sales trend and current and projected store profitability. In years past, marginal stores were renewed for an additional year to give the store more time to improve its sales trend and profitability," stated John Cato, Chairman, President, and Chief Executive Officer. "In light of the current economic environment, especially with the negative pressure on our customers' discretionary income, we do not expect these marginal stores to improve appreciably. As a result, we are closing more stores than expected this year. We believe that closing these additional stores will have a positive impact on our operating results in fiscal 2027 and beyond."