Cato Corporation (the)NYSE: CATO

Annual Report for Fiscal Year Ending 01-31, 2025 (Form 10-K)

Mar 25, 2026 at 8:46 PM UTC · Issued by Cato Corporation (the)

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form

10-K

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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended

January 31, 2026

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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number

1-31340

The Cato Corporation

Registrant

Delaware

56-0484485

State of Incorporation

I.R.S. Employer Identification Number

8100 Denmark Road

Charlotte

North Carolina

28273-5975

Address of Principal Executive Offices

704

554-8510

Registrant's TelephoneNumber

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A - Common Stock, par value $.033 per share

CATO

New York Stock Exchange

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

None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes

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Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.Yes

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Indicate by check mark whether the Registrant (1) hasfiled all reports required to be filedby Section 13 or 15(d) of the Securities ExchangeAct of

1934 duringthe preceding12 months (orfor suchshorter periodthat theRegistrant wasrequired tofile suchreports), and(2) has beensubject to

such filing requirements for the past 90 days.Yes

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Indicate bycheck markwhether theregistrant hassubmitted electronicallyevery InteractiveData Filerequired tobe submittedpursuant toRule

405ofRegulationS-T(§232.405 ofthischapter) duringthe preceding12months(orforsuchshorter periodthattheregistrant wasrequiredto

submit such files). Yes

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Indicate by check markwhether the registrant isa large acceleratedfiler, an acceleratedfiler, a non-accelerated filer, asmaller reporting company,

or anemerging growthcompany.See thedefinitions of"large acceleratedfiler,""accelerated filer,""smaller reportingcompany" and"emerging

growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

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Accelerated filer

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Emerging Growth Company

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Non-accelerated filer

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Smaller reporting company

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Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodfor

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

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Indicatebycheckmarkwhethertheregistranthasfiledareportonandattestationtoitsmanagement'sassessmentoftheeffectivenessofits

internalcontrol overfinancial reportingunder Section404(b) ofthe Sarbanes-OxleyAct (15U.S.C. 7262(b))by theregistered publicaccounting

firm that prepared or issued its audit report.

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If securities are registeredpursuant to Section12(b) of theAct, indicate by checkmark whether thefinancial statements ofthe registrant included

in the filing reflect the correction of an error to previously issued financial statements.

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Indicate by checkmark whether anyof those errorcorrections are restatementsthat required arecovery analysis of incentive-basedcompensation

received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

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

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TheaggregatemarketvalueoftheRegistrant'sClass ACommonStockheldbynon-affiliatesoftheRegistrantasofAugust2,2025,thelast

business day ofthe Company'smost recent secondquarter, was$

46,198,006

based on thelast reported saleprice per shareon the NewYorkStock

Exchange on that date.

As of January 31, 2026, there were

17,976,854

shares of Class A common stock and

1,763,652

shares of Class B common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement relating to the 2026 annual meeting of shareholders are incorporated by reference into Part III.

THE CATO CORPORATION

FORM 10-K

TABLE OF CONTENTS

Page

PARTI

Item 1.

Business..........................................................................................................................

5 - 10

Item 1A.

Risk Factors....................................................................................................................

10 - 23

Item 1B.

Unresolved Staff Comments...........................................................................................

Item 1C.

Cybersecurity..................................................................................................................

Item 2.

Properties........................................................................................................................

Item 3.

Legal Proceedings...........................................................................................................

Item 3A.

Executive Officers of the Registrant...............................................................................

Item 4.

Mine Safety Disclosures.................................................................................................

PARTII

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities........................................................................................

26 - 28

Item 7.

Management's Discussion and Analysis of Financial Condition and Results

of Operations ..................................................................................................................

29 - 34

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk........................................

Item 8.

Financial Statements and Supplementary Data ..............................................................

35 - 67

Item 9.

Changes in and Disagreements with Accountants on Accountingand Financial

Disclosure.......................................................................................................................

Item 9A.

Controls and Procedures.................................................................................................

Item 9B.

Other Information...........................................................................................................

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections............................

PARTIII

Item 10.

Directors, Executive Officers and Corporate Governance .............................................

Item 11.

Executive Compensation................................................................................................

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters........................................................................................................

Item 13.

Certain Relationships and Related Transactions, and Director Independence...............

Item 14.

Principal Accountant Fees and Services.........................................................................

PARTIV

Item 15.

Exhibits and Financial Statement Schedules..................................................................

Item 16.

Form 10-K Summary ………………………………………………………………….

Forward-looking Information

ThefollowinginformationshouldbereadalongwiththeConsolidatedFinancialStatements,

including theaccompanying Notesappearing inthis report.Any ofthe followingare "forward-looking"

statements within the meaning of Section 27A of the Securities Act of 1933, as amended,and Section 21E

of the Securities Exchange Act of 1934, as amended: (1) statements in this Form 10-K and any documents

incorporatedbyreferencethatreflectprojectionsorexpectationsofourfuturefinancialoreconomic

performance;(2) statementsthatarenothistorical information;(3) statementsofourbeliefs,intentions,

plansandobjectives forfuture operations,including thosecontained in"Management'sDiscussion and

Analysis ofFinancial Conditionand ResultsofOperations"; (4) statementsrelating toour operationsor

activitiesforourfiscalyearendingJanuary30,2027("fiscal2026")andbeyond,including,butnot

limited to, statements regarding expected amounts of capital expenditures and store openings, relocations,

remodelsandclosures,statementsregardingthepotentialimpactofpublichealththreatsandrelated

responsesandmitigationefforts,aswellasthepotentialimpactofsupplychaindisruptions,extreme

weather conditions,trade policies,inflationary pressures andother economicconditions onour business,

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

not limited to, prevailing social,economic, political and public healthconditions and uncertainties, levels

of unemployment, fuel, energy and food costs,inflation, wage rates, tax rates, interest rates, home values,

consumernetworthandtheavailabilityofcredit;changesinlaws,regulationsorgovernmentpolicies

affecting our business, includingbut not limited totariffs and taxes; uncertaintiesregarding the impact of

anygovernmentalactionregarding,orresponsesto,theforegoingconditions;competitivefactorsand

pricingpressures;ourabilitytopredictandrespondtorapidlychangingfashiontrendsandconsumer

demands;ourabilitytosuccessfully opennewstoresinattractivelocationsandtheabilityofanysuch

newstorestogrowandperformasexpected;underperformanceorotherfactorsthatmayleadtoa

continuation oracceleration ofstore closuresand negativelyaffect theCompany'sprofitability; adverse

weather, publichealth threats, acts ofwar or aggressionor similar conditionsthat may affectour sales or

operations;inventoryrisksduetoshiftsinmarketdemand,includingtheabilitytoliquidateexcess

inventoryatanticipatedmargins;adversedevelopmentsorvolatilityaffectingthefinancialservices

industry or broader financial markets; andother factors discussed under "Risk Factors"in Part I, Item 1A

of this annual report on Form 10-K for the fiscal year ended January 31, 2026 ("fiscal 2025"), as amended

or supplemented, and inother reports we filewith or furnish tothe Securities and ExchangeCommission

("SEC")fromtimetotime.Wedonotundertake, andexpresslydecline,anyobligationtoupdateany

such forward-looking information containedin this report,whether as aresult of newinformation, future

events, or otherwise.

As used herein,the terms "we,""our,""us," the "Company"or "Cato"include The CatoCorporation

anditssubsidiaries,unlessthecontextindicatesanothermeaningandexceptthatwhenusedwith

referencetocommonstockorothersecuritiesdescribedhereinandindescribingthepositionsheldby

management ofthe Company,such termsinclude onlyThe CatoCorporation.Our websiteis locatedat

www.catofashions.comwherewemakeavailable,freeofcharge,ourannualreportsonForm 10-K,

quarterlyreportsonForm 10-Q,currentreportsonForm 8-K,proxystatementsandotherreports

(including amendmentstothesereports) filedorfurnishedpursuant toSection 13(a) or15(d)underthe

Securities ExchangeAct of1934. Thesereports areavailable assoon asreasonably practicableafter we

electronically filethesematerials withtheSEC. Wealso poston ourwebsite thecharters ofourAudit,

CompensationandCorporateGovernanceandNominatingCommittees;ourCorporateGovernance

Guidelines; Code of Business Conduct and Ethics andCode of Ethics for thePrincipal Executive Officer,

Principal Financial Officerand Principal AccountingOfficer andany amendments orwaivers thereto for

any of our directors or executive officers; and any other publicly available corporate governance materials

contemplatedbySECorNewYorkStockExchangeregulations.Theinformationcontainedonour

website, www.catofashions.com,is not,and should inno way beconstrued as, apart of thisor any other

report that we filed with or furnished to the SEC.

PARTI

Item 1.

Business:

Background

TheCompany,foundedin1946,operated1,069fashionspecialtystoresatJanuary31,2026,in31

states,principallyinthesoutheasternUnitedStates,underthenames"Cato,""CatoFashions,""Cato

Plus,""It'sFashion,""It'sFashionMetro"and"Versona."TheCatoconceptseekstoofferquality

fashionapparelandaccessoriesatlowpriceseveryday,injunior/missyandplussizes.TheCato

concept's stores and e-commerce website feature a broad assortment of apparel and accessories, including

dressy,career,andcasualsportswear,dresses,coats,shoes,lingerie,costumejewelryandhandbags.A

major portion of the Cato concept'smerchandise is sold under its private label and is produced by various

vendorsinaccordancewiththeconcept'sspecifications.TheIt'sFashionandIt'sFashionMetro

concepts offer fashion with a focus on the latest trendy styles for the entire family at low prices every day.

TheVersonaconcept'sstoresande-commerce websiteofferquality fashionapparel items,jewelryand

accessories at exceptionalvalues every day.The "Cache" brandis a shopwithin Versonastores, as well

asane-commerce website,thatofferselevatedfashion apparelitems andaccessories.TheCompany's

stores rangein sizefrom 2,400to 19,000square feetand arelocated primarilyin stripshopping centers

anchored by nationaldiscounters or market-dominant grocerystores.The Company emphasizes friendly

customerserviceandcoordinatedmerchandisepresentationsinanappealingstoreenvironment.The

Companyoffersitsowncreditcardandlayawayplan.CreditandlayawaysalesundertheCompany's

plan represented6% of retailsales infiscal 2025. SeeNote 13 tothe Consolidated FinancialStatements,

"ReportableSegmentInformation,"foradiscussionofinformationregardingtheCompany'stwo

reportable segments: Retail and Credit.

TheCompanyhasoperatedCato-brandedretailstoresfor79years.TheCompany originatedasa

family-owned business andmade itsfirst initialpublic offeringof stockin 1968.In 1980,the Company

went private and in 1987 again conducted an initial public offering.

Business Strategy

The Company'sprimary objectiveis tobe theleading fashionspecialty retailerfor fashionand value

in itsmarkets. Management believes theCompany's successis dependent uponits ability todifferentiate

its storesfrom departmentstores, massmerchandise discountstores andcompeting specialtystores. The

key elements of the Company's business strategy are:

MerchandiseAssortment.

TheCompany'sstoresofferawideassortmentofon-trendappareland

accessory items in primarily junior/missy,plus sizes, men and kids sizes, toddler toboys size 20 and girls

size 16 withan emphasis on color,product coordination and selection.Colors and styles arecoordinated

and presented so that outfit selection is easily made.

ValuePricing.

TheCompany offersqualitymerchandise thatisgenerally pricedbelow comparable

merchandiseofferedbydepartmentstoresandmallspecialtyapparelchains,butisgenerallymore

fashionablethanmerchandiseofferedbydiscountstores.ManagementbelievesthattheCompanyhas

positioned itself as the every day low price leader in its marketsegment.

StripShoppingCenterLocations.

TheCompanylocatesitsstoresprincipallyinconvenientstrip

centers anchored bynational discounters ormarket-dominant grocery storesthat attract largenumbers of

potential customers.

Customer Service.

Store managersand salesassociates aretrainedtoprovide promptand courteous

service and to assist customers in merchandise selection and wardrobecoordination.

Credit andLayaway Programs

.The Company offersits own creditcard and alayaway plan tomake

the purchase of its merchandise more convenient for its customers.

Merchandising

TheCompanyseekstoofferabroadselectionofhighqualityandexceptionalvalueappareland

accessoriestosuitthevariouslifestylesoffashionandvalue-consciouscustomers.Inaddition,the

Company strives to offer on-trend fashion in exciting colors with consistent fit andquality.

The Company's merchandise linesinclude dressy, career,and casual sportswear, dresses,coats, shoes,

lingerie, costumejewelry,handbags, men'swear andlines forkids andinfants. TheCompany primarily

offers exclusivemerchandise withfashion andquality comparableto mallspecialty storesat lowprices,

every day.

The Company believes that the collaboration of its merchandising and design teams with an expanded

in-houseproductdevelopmentanddirectsourcingfunctionhasenhancedmerchandiseofferingsand

delivers quality,exclusive on-trendstyles atlower prices.The productdevelopment anddirect sourcing

operations provideresearch onemerging fashionand colortrends, technicalservices anddirect sourcing

options.

As apart ofits merchandisingstrategy,members ofthe Company'smerchandising anddesign staff

visit selectedstores tomonitor themerchandise offeringsof otherretailers, regularlycommunicate with

store operationsassociates and frequentlyconfer withkey vendors.The Companyalso takesaggressive

markdownsonslow-sellingmerchandiseandtypicallydoesnotcarryovermerchandisetothenext

season.

Purchasing, Allocation and Distribution

AlthoughtheCompanypurchasesmerchandisefromapproximately560suppliers,mostofits

merchandise ispurchased fromapproximately 100primary vendors.Infiscal2025,purchases fromthe

Company'slargestvendoraccountedforapproximately14%oftheCompany'stotalpurchases.The

Company isnot dependenton itslargest vendoror anyother vendorfor merchandisepurchases, andthe

loss of any single vendor or group ofvendors would not have a material adverse effect onthe Company's

operating results or financial condition. A substantial portion of the Company's merchandise is sold under

itsprivatelabelsandisproducedbyvariousvendorsinaccordancewiththeCompany'sstrict

specifications. The Company sources a majority of itsmerchandise directly from manufacturers overseas,

primarily in Southeast Asia and Egypt.These manufacturers are dependent on materials that are primarily

sourcedfromChina.TheCompanypurchasesitsremainingmerchandisefromdomesticimportersand

vendors, which typically minimizesthe time necessaryto purchase andobtain shipments; however,these

vendorsaredependentonmaterialsprimarilysourcedfromChina.TheCompanyopeneditsown

overseassourcingoperationsin2014.AlthoughasignificantportionoftheCompany'smerchandise is

manufacturedoverseas,primarilyinSoutheastAsia,theCompanydoesnotexpectthatanyeconomic,

political,publichealthorsocialunrest inanyonecountrywouldhaveamaterialadverse effectonthe

Company'sabilitytoobtainadequatesuppliesofmerchandise.However,theCompanycangiveno

assurancethatanychangesordisruptionsinitsmerchandisesupplychainwouldnotmateriallyand

adversely affect theCompany.See "Risk Factors -Risks Relating to OurBusiness - Because wesource

asignificantportionofourmerchandisedirectlyandindirectlyfromoverseas,wearesubjecttorisks

associatedwithincreasedcosts,changes,disruptionsorotherproblemsaffectingtheCompany's

merchandisesupplychain,risksassociatedwithtradepolicies,includingcostsanduncertaintiesasthe

result ofactual orthreatened tariffs,the risksof conductinginternational operationsand risksthat affect

the prevailingeconomic, social,geopolitical, publichealth andother conditionsin theareas fromwhich

wesourcemerchandise.Theseriskshaveandcouldcontinuetomateriallyandadverselyaffectthe

Company's business, results of operations and financial condition."

AnimportantcomponentoftheCompany'sstrategyistheallocationofmerchandisetoindividual

storesbasedonananalysisofsalestrendsbymerchandisecategory,customerprofilesandclimatic

conditions.Amerchandisecontrolsystemprovidescurrentinformationonthesalesactivityofeach

merchandisestyleineachoftheCompany'sstores.Point-of-saleterminalsinthestorescollectand

transmit sales and inventory information to the Company's central database, permitting timely response to

sales trends on a store-by-store basis.

All merchandise is shipped directly to the Company's distributioncenter in Charlotte, North Carolina,

where itis inspectedand thenallocated bythe merchandisedistribution stafffor shipmentto individual

stores. The flowof merchandise fromreceipt atthe distribution centerto shipment tostores is controlled

byanonlinesystem.Shipmentsaremadebycommoncarrier,andeachstorereceivesatleastone

shipment perweek.The centralizationof theCompany'sdistribution processalso subjectsit torisks in

theeventofdamagetoordestructionofitsdistributionfacilityorotherdisruptionsaffectingthe

distributioncenterortheflowofgoodsintooroutofCharlotte,NorthCarolina.See"RiskFactors-

RisksRelatingtoOurInformationTechnology,RelatedSystemsandCybersecurity-Adisruptionor

shutdown ofour centralizeddistribution centeror transportationnetwork couldmaterially andadversely

affect our business and results of operations."

Advertising

TheCompanyusestelevision,in-storesignage,graphics,aCompanywebsite,twoe-commerce

websitesandsocialmediaasitsprimaryadvertisingmedia.TheCompany'stotaladvertising

expenditureswereapproximately0.8%,0.8%and1.0%ofretailsalesforfiscalyears2025,2024and

2023, respectively.

Store Operations

TheCompany'sstoreoperationsmanagementteamconsistsoffourterritorialmanagers,eight

regionalmanagers and68 districtmanagers. Regionalmanagers receivea salaryplusabonus basedon

achieving targetedgoals forsales andpayroll.District managersreceive asalary plusa bonusbased on

achieving targetedobjectives for districtsales increases. Storesare typically staffedwith amanager, two

assistantmanagersandadditionalpart-timesalesassociatesdependingonthesizeofthestoreand

seasonalpersonnelneeds.Ingeneral,storemanagersarepaidasalaryoronanhourlybasisasareall

otherstorepersonnel.Storemanagers,assistantmanagersandsalesassociatesareeligibleformonthly

and semi-annual bonuses based on achieving targeted goals for their respectivestore's sales increases.

Store Locations

MostoftheCompany'sstoresarelocatedinthesoutheasternUnitedStates inavariety ofmarkets

rangingfromsmalltownstolargemetropolitanareaswithtradeareapopulationsof20,000ormore.

Stores average approximately 4,500 square feet in size.

All of theCompany's storesare leased. Approximately 94% arelocated in strip shoppingcenters and

6% in enclosedshopping malls. TheCompany typically locates storesin strip shoppingcenters anchored

byanationaldiscounter,primarilyWalmartSupercenters,ormarket-dominantgrocerystores.The

Company's strip center locations provide ample parking and shopping convenience for its customers.

TheCompany'sstoredevelopmentactivitiesconsistofopeningnewstoresinnewandexisting

markets,relocatingselectedexistingstorestomoredesirablelocationsinthesamemarketareaand

closing underperforming stores. The following table sets forth informationwith respect to the Company's

development activities since fiscal 2021:

Store Development

Number of Stores

Beginning of

Number

Number of Stores

Fiscal Year

Year

Opened

Closed

End of Year

2021………………….……...………….

1,330

1,311

2022………………….……...………….

1,311

1,280

2023……………………….……...…….

1,280

111

1,178

2024…………....………….……...…….

1,178

1,117

2025………….………...….……...…….

1,117

1,069

The Company periodically reviews its store base to determine whether any particular store should be

closed based on its salestrends and profitability.The Company intends to continue thisreview process to

identify underperforming stores.

Credit and Layaway

Credit Card Program

The Company offers its own credit card, which accounted for 3.3%, 3.4% and 3.4% ofretail sales in

fiscal 2025,2024 and2023, respectively.The Company'sbad debtexpense,net ofrecovery,was 4.9%,

3.9% and 3.6% of credit sales in fiscal 2025, 2024 and 2023, respectively.

Customers applying for the Company's credit card are approved for credit ifthey have a satisfactory

creditrecordandtheCompanyhaspositivelyassessedthecustomer'sabilitytomaketherequired

minimum payment.Customers are required to makeminimum monthly payments based ontheir account

balances.Ifthebalanceisnotpaidinfulleachmonth,theCompanyassessesthecustomerafinance

charge.Ifpaymentsarenotreceivedontime,thecustomerisassessedalatefeesubjecttoregulatory

limits.

TheCompanyintroduceditsloyaltyprograminOctober2021.Theloyaltyprogramcreditsthe

customer points based on their purchases ofmerchandise using the Company's proprietarycredit card.

point is earned for every dollar spent on merchandise purchases.

$5.00 rewards card is earned for every

250pointsaccumulatedbythecustomer.Therewardscardexpires90daysaftertherewardscardis

issued.Theimpactoftheloyaltyprogramisimmaterialtothefiscal2025financialstatements.The

loyaltyprogramisaccountedforinaccordancewithASU2014-09,

RevenuefromContractswith

Customers (Topic 606)

Layaway Plan

UndertheCompany'slayawayplan,merchandiseissetasideforcustomerswhoagreetomake

periodicpayments.TheCompany addsanonrefundableadministrativefeetoeachlayawaysale.Ifno

payment is made within four weeks,the customer is considered to havedefaulted, and the merchandise is

returnedtotheselling floorand againofferedforsale, oftenata reducedprice. Allpayments madeby

customers who subsequently default on their layaway purchase are returned to the customer upon request,

less the administrative fee and a restocking fee.

The Company defers recognition of layaway sales to the accounting period when the customer picks

upandcompletely paysforlayawaymerchandise.Administrative feesarerecognizedintheperiodin

which thelayaway isinitiated.Recognition ofrestocking fees occursin theaccounting periodwhen the

customerdefaultsonthelayawaypurchase.Layawaysalesrepresentedapproximately2.6%,2.8%and

3.0% of retail sales in fiscal 2025, 2024 and 2023, respectively.

Information Technology Systems

TheCompany'sinformationtechnologysystemsprovidedailyfinancialandmerchandising

informationthatisusedbymanagement toenhancethetimelinessandeffectivenessofpurchasing and

pricingdecisions.Managementusesadailyreportcomparingactualsaleswithplannedsalesanda

weeklyrankingreporttomonitorandcontrolpurchasingdecisions.Weeklyreportsarealsoproduced

which reflectsales, weeksofsupply ofinventory andother criticaldata byproduct categories,by store

and by various levels ofresponsibility reporting. Purchases are made basedon projected sales, but canbe

modified to accommodate unexpected increases or decreases in demandfor a particular item.

Sales information isprojected by merchandisecategory and, insome cases, isfurther projected and

actualperformance measuredbystockkeepingunit(SKU).Merchandiseallocationmodelsareusedto

distributemerchandisetoindividualstoresbaseduponhistoricalsalestrends,climaticconditions,

customer demographics and targeted inventory turnover rates.

Competition

The women'sretail apparel industry ishighly competitive. The Company believesthat the principal

competitive factorsin itsindustry includemerchandise assortmentand presentation,fashion, price,store

locationandcustomerservice. TheCompany competeswithretailchains thatoperate similarwomen's

apparel specialty stores. In addition, the Company competes withmass merchandise chains, discount store

chains, majordepartment stores, off-price retailersand internet-basedretailers.Although webelieve we

compete favorablywith respectto theprincipal competitivefactors describedabove, manyof ourdirect

andindirectcompetitorsarewell-establishednational,regionalorlocalchains,andsomehave

substantially greaterfinancial, marketingand otherresources.The Companyexpects itsstores inlarger

cities and metropolitan areas to face more intense competition.

Seasonality

Duetotheseasonalnatureoftheretailbusiness,theCompanyhashistoricallyexperiencedand

expects to continue toexperience seasonal fluctuations in itsrevenues, operating income andnet income.

Our storestypically generate ahigher percentage ofour annual netsales andprofitability in thefirst and

second quarters ofour fiscal year comparedto other quarters.Results of aperiod shorter than afull year

maynotbeindicativeofresultsexpectedfortheentireyear.Furthermore,theseasonalnatureofour

business may affect comparisons between periods.

Regulation

TheCompany'sbusinessandoperationssubjectittoawiderangeoflocal,state,nationaland

international lawsand regulationsin avariety ofareas, includingbut notlimited to,trade, licensingand

permitrequirements,importandexportmatters,privacyanddataprotection,creditregulation,

environmentalmatters,recordkeepingandinformationmanagement,tariffs,taxes,intellectualproperty

and anti-corruption.Though compliance with theselaws and regulations hasnot had amaterial effect on

our capitalexpenditures, resultsof operationsor competitiveposition infiscal 2025,the Companyfaces

ongoingrisksrelatedtoitseffortstocomplywiththeselawsandregulationsandrisksrelatedto

noncompliance,asdiscussedgenerallybelowthroughoutthe"RiskFactors"sectionandinparticular

under"Risk Factors - Risks Relating to Accounting and Legal Matters -Our business operations subject

ustolegalcompliance andlitigationrisks, aswell asregulations andregulatory enforcementpriorities,

whichcouldresultinincreasedcostsorliabilities,divertourmanagement'sattentionorotherwise

adversely affect our business, results of operations and financial condition."

Human Capital

AsofJanuary31,2026,theCompanyemployedapproximately6,700full-timeandpart-time

associates. TheCompany alsoemploys additionalpart-time associatesduring thepeak retailingseasons.

TheCompany'sfull-timeassociatesareengagedinvariousexecutive,operating,andadministrative

functionsinthehomeofficeanddistributioncenter andtheremainderareengaged instoreoperations.

The Company isnot a partyto anycollective bargaining agreementsand considers itsassociate relations

tobegood.TheCompanyoffersabroadrangeofCompany-paidbenefitstoitsassociatesincluding

medical anddental plans,paid vacation,a 401(k)plan, EmployeeStock PurchasePlan, EmployeeStock

OwnershipPlan,disabilityinsurance,associateassistanceprograms,lifeinsuranceandanassociate

discount.Thelevelofbenefitsandeligibilityvarydependingontheassociate'sfull-timeorpart-time

status,dateofhire,lengthofserviceandlevelofpay.TheCompanyendeavorstopromotean

environment where all associates can develop and flourish, to provide opportunities for advancement, and

totreatallofitsassociateswithdignityandrespect.TheCompanyconstantlystrivestoimproveits

trainingprogramstodevelopassociates.Over80%ofstoreandfieldmanagementarepromotedfrom

within,allowing theCompany tointernallystaffitsstorebase.TheCompany hastrainingprogramsat

eachlevelofstoreoperations.TheCompanyalsoperformsongoingreviewsofitssafetyprotocols,

including measures to promote the health and safety of its associates.

Item 1A.

Risk Factors:

An investment in our common stock involves numerous types of risks.Youshould carefully consider

thefollowingriskfactors,inadditiontotheotherinformationcontainedinthisreport,includingthe

disclosuresunder"Forward-lookingInformation"aboveinevaluatingourCompanyandanypotential

investmentinourcommonstock.Ifanyofthefollowingrisksoruncertaintiesoccurorpersist,our

business, financial condition andoperating results couldbe materially andadversely affected, thetrading

priceofourcommonstockcoulddecline,andyoucouldloseallorapartofyourinvestmentinour

commonstock.Therisksanduncertaintiesdescribedinthissectionarenottheonlyonesfacingus.

Additional risksand uncertaintiesnot presentlyknown tous orthat wecurrently deemimmaterialmay

also materiallyand adverselyaffect ourbusiness, operating results,financial condition,and valueof our

commonstock.ThesedisclosuresreflecttheCompany'sbeliefsandopinionsastofactorsthatcould

materiallyandadverselyaffecttheCompanyanditssecuritiesinthefuture.Referencestoparticular

events or contingencies are provided asexamples only and should not beinterpreted as a complete listing

oras anyrepresentation aboutwhether ornot suchevents orcontingencies haveoccurred inthe pastor

may occur in the future.

Risks Relating to Our Business:

Because we source a significant portion of our merchandise directlyand indirectly from overseas,

we are subject to risks associated with increased costs, changes, disruptionsor other problems

affecting the Company's merchandise supply chain, risks associated with trade policies, including

costs and uncertainties as the result of actual or threatened tariffs, the risks of conducting

international operations and risks that affect the prevailing economic, social,geopolitical, public

health and other conditions in the areas from which we sourcemerchandise. These risks have and

could continue to materially and adversely affect the Company's business, results of operations

and financial condition.

Wedonotownoroperateanymanufacturingfacilities.Asaresult,thecontinuedsuccessofour

operationsistiedtoourtimelyreceiptofqualitymerchandisefromthirdpartymanufacturersata

reasonablecost.Asignificantamountofourmerchandiseismanufacturedoverseas,principallyin

SoutheastAsiaandEgypt.Geopoliticaltensions,conflicts,sanctions,prohibitions,additionalactualor

threatened tariffs, compliance and reporting requirementshave resulted in increased costs associated with

merchandise producedin certainregions. Anynew sanctions,tariffsand reportingrequirements enacted

in the futuremay further increase ourcosts associated with sourcingproducts from those regionsor limit

our ability toprocure the productswe source, andour ability tosource these products fromother regions

may be limitedor result inincreased sourcing costs.Weare subject tosupply chain disruptionsaffecting

transit timesand costs,including disruptions fromissues relatedto vesselstransiting the SuezCanal and

Red Sea,which arebeing forced totravel amuch longer distancearound the Capeof GoodHope due to

the hostilities in the Middle East. Theseissues have and may continue to driveup our ocean freight costs,

delaymerchandisedeliveries,andimpactourabilitytoaccessthealreadylimitedsupplyofocean

container shipping capacity that we require. Additionally,we may be subject to additionalcosts related to

our supplychain suchas increasedfacility fees,fuel costs,peak surchargesand otheradditional charges

totransportourgoods,whichmayincreaseourcosts.Wealsoaresubjecttodomesticsupplychain

disruptions,includinglackofdomesticintermodaltransportation(trucksanddrivers),domesticport

congestion, including increased dwelltimes for incoming containerships, lack of containeryard capacity

and lack ofavailable drayage fromthe portsand other conditionsthat impact ourdomestic supply chain.

Thesesupplychainriskshaveandmaycontinuetoresultinbothhighercoststotransportour

merchandise and delayed merchandise arrivals toour stores, which adversely affectour ability to sell this

merchandise and increase markdowns of it.

Wedirectly importsome ofthis merchandiseand indirectlyimport theremaining merchandisefrom

domestic vendors who acquire the merchandise from foreignsources. Further, our third-partyvendors are

dependentonmaterialsprimarilysourcedfromChina,andourcostsforthesematerialsarelikelyto

increase asa resultof newly implementedtariffs onChinese products. Weare subjectto numerousrisks

that cancause significantdelays orinterruptions inthe supplyof ourmerchandise orincrease ourcosts.

These risks include political unrest,labor disputes, terrorism, war,public health threats, including butnot

limitedtocommunicable diseases(suchasCOVID-19 orotherpandemics), financialorotherformsof

instability orother eventsresulting inthedisruption oftradefrom countriesaffecting oursupply chain,

increasedsecurityrequirementsforimportedmerchandise,ortheimpositionof,orchangesin,laws,

regulations orchanges induties, quotas, tariffs,taxes orgovernmental policies regardingor responsesto

these mattersor otherfactors affectingthe availabilityor costof imports.If weare unableto passthese

increasedsourcingcostsontoourvendorsorourcustomers,itmayadverselyimpactourresultsof

operations.

Increased product costs, freight costs, wage increases and operatingcosts due to inflation and

other factors, as well as limitations in our ability to offset these cost increases by increasingthe

retail prices of our products or otherwise, have and may continue to adversely affect our business,

margins, results of operations and financial condition.

Ourabilitytoraiseretailpricesinresponsetothesecostincreasesislimited,inpartduetoour

customers'unwillingnesstopayhigherpricesfordiscretionaryitemsinlightofactualorperceived

effects of pricing pressure on consumer confidence,limited customer disposable income to purchase our

products,sentimentorfinancialoutlook.Moreover,thepersistenceorworseningoftheseconditions

couldalso leadour customersto reducetheir amountofcurrent discretionaryspending onourproducts

evenintheabsenceofpriceincreases,whichcoulderodeoursalesvolumeandadverselyaffectour

results of operations and financial condition.

Any actual or perceived deterioration in the conditions that driveconsumer confidence and

spending have and may continue to materially and adversely affect consumer demandfor our

apparel and accessories and our results of operations.

Consumerspendinghabits,includingspendingforourapparelandaccessories,areaffectedby,

among otherthings, prevailingsocial, economic,political andpublic healthconditions anduncertainties

(suchasmattersunderdebateintheU.S.fromtimetotimeregardingbudgetary,spendingandtax

policies),levelsofemployment, fuelcosts,inflation,interestrates,energyandfoodcosts,salariesand

wage ratesand othersources ofincome, taxrates, homevalues, consumernet worth,the availabilityof

consumercredit,consumerconfidenceandconsumerperceptionsofadversechangesinortrends

affecting any of these conditions. Any perception that these conditions may be worsening or continuing to

trend negativelymay significantlyweaken manyofthese driversof consumerspending habits.Adverse

perceptions ofthese conditionsoruncertainties regardingthem alsogenerally causeconsumers todefer

purchasesofdiscretionaryitems,suchasourmerchandise,ortopurchasecheaperalternativestoour

merchandise, allof whichmay alsoadversely affectournet salesand resultsof operations.In addition,

numerous events,whether ornotrelated toactualeconomic conditions,suchas downturnsinthestock

markets,actsofwarorterrorism,geopoliticaluncertaintyorunrestornaturaldisasters,outbreaksof

diseaseorsimilarevents,mayalsodampenconsumerconfidence,andaccordingly,leadtoreduced

consumer spending.Any ofthese eventscould havea materialadverse effecton ourbusiness, resultsof

operations and financial condition.

Fluctuations in the price, availability and quality of inventory have andmay continue to result in

higher cost of goods, which the Company may not be able to pass on toits customers.

Thepriceandavailabilityofrawmaterialsmaybeimpactedbydemandandsupplyfluctuations,

regulation, tariffs, weather andcrop yields, currency value fluctuations, inflation, aswell as other factors.

Additionally,manufacturers have andmay continue tohave increases inother manufacturing costs,such

astransportation,laborandbenefitcosts.Theseincreasesinproductioncostsmayresultinhigher

merchandise costs to the Company.Due to the Company'slimited flexibility in price point, theCompany

maynotbeabletopassonthosecostincreasestotheconsumer,whichcouldhaveamaterialadverse

effect on our margins, results of operations and financial condition.

Our inability to effectively manage inventory has impacted and may continueto negatively impact

our gross margin and our overall results of operations.

Factorsaffectingsalesincludefashiontrends,customerpreferences,calendarandholidayshifts,

competition,weather,supplychainissues,actualorpotentialpublichealththreatsandeconomic

conditions, includingbut notlimited tocontinued highinterest ratesand persistentinflation. Inaddition,

merchandisemustbeorderedwellinadvanceoftheapplicablesellingseasonandbeforetrendsare

confirmedbysales.Whenwearenotabletoaccurately predictcustomers' preferencesforourfashion

items, we may have toomuch inventory, whichmay cause excessive markdowns. When weare unable to

accuratelypredictdemandforourmerchandise,wemayendupwithinventoryshortages,resultingin

missedsales.Ourinabilitytoeffectivelymanageinventorymaycontinuetoadverselyaffectourgross

margin and results of operations.

The competitive hiring environment and our failure to attract, train,and retain skilled personnel

has and could continue to adversely affect our business and our financial condition.

Like mostretailers, we experiencesignificant associate turnoverrates, particularly amongstore sales

associatesandmanagers.Moreover,attractingandretainingskilledpersonnelhasbeenandcould

continuetobechallenging.Tooffsetthisturnoveraswellassupportnewstoregrowth,wemust

continually attract, hire and train new store associates to meet our staffing needs. Asignificant increase in

theturnoverrateamongourstoresalesassociatesandmanagerswouldincreaseourrecruitingand

training costs, as wellas possibly cause adecrease in our storeoperating efficiency and productivity.We

competeforqualifiedstoreassociates,aswellasexperiencedmanagementpersonnel,withother

companies in our industry or other industries, many of whom have greater financialresources than we do.

Inaddition,wedependonkeymanagementpersonneltooverseetheoperationaldivisionsofthe

Companyforthesupportofourexistingbusinessandfutureexpansion.Thesuccessofexecutingour

business strategydepends inlarge parton retainingkey management.Wecompete forkey management

personnelwithotherretailers, andourinabilitytoattractandretainqualified personnelcouldlimitour

ability to grow.

Ifweareunabletoretainourkey managementandstoreassociates orattract, train,orretainother

skilledpersonnel inthefuture,wemay notbeabletoserviceourcustomers effectivelyorexecuteour

business strategy, which could adversely affect our business, operating results and financial condition.

The currentlycompetitive environmentfor hiringnew associatesand retainingexisting associatesis

causingwagestoincrease,whichhasaffectedandcouldcontinuetoadverselyaffectourbusiness,

margins, operating results and financial condition if we cannot offset these cost increases.

Our ability to attract consumers and grow our revenues is dependenton the success of our store

location strategy and our ability to successfully open new stores as planned.

Our sales aredependent in parton the locationof our storesin shopping centersand malls wherewe

believeourconsumersandpotentialconsumersshop.Inaddition,ourabilitytogrowourrevenueshas

been substantially dependent on our ability to secure space for and open new stores in attractive locations.

Shopping centersand mallswhere wecurrently operateexisting storesor seektoopen newstores have

been andmay continueto beadversely affectedby,among otherthings, generaleconomic downturnsor

thoseparticularly affectingthecommercial realestate industry,theclosing ofanchorstores, changesin

tenantmixandchangesincustomershoppingpreferences,includingbutnotlimitedtoanincreasein

preference for onlineversus in-person shopping. Totake advantage ofconsumer traffic andthe shopping

preferencesofourconsumers,weneedtomaintainandacquirestoresindesirablelocationswhere

competition for suitablestore locations isintense. A declinein customer popularityof thestrip shopping

centers where wegenerally locate ourstores or inavailability of space indesirable centers andlocations,

or an increase in the cost of such desired space, has limited and could further limit our ability to open new

stores,adverselyaffectingconsumertrafficandreducingoursalesandnetearningsorincreasingour

operating costs.

Our abilityto openand operatenew storesdepends onmany factors,some ofwhich arebeyond our

control.Thesefactorsinclude,butarenotlimitedto,ourabilitytoidentifysuitablestorelocations,

negotiate acceptable lease terms, securenecessary governmental permits and approvals andhire and train

appropriate storepersonnel. Inaddition, ourcontinued expansioninto newregions ofthe countrywhere

wehavenotdonebusinessbeforemaypresentnewchallengesincompetition,distributionand

merchandising as we enter these new markets. Our failure to successfully and timelyexecute our plans for

opening new storesor the failureof these storesto perform upto our expectationscould adversely affect

our business, results of operations and financial condition.

Continued high interest rates have and may continue to adverselyimpact our customers'

discretionary income or willingness to purchase discretionary items, whichmay adversely affect

our business, margins, results of operations and financial condition.

Continued high interest rates have adversely affected our customers' discretionary income, in part due

to increasedinterest costsassociated withcredit accountsincluding revolvingcredit accounts,car loans,

mortgage loans and other credit accounts. Inaddition, the increased payments due to higherinterest rates,

combinedwithcontinuedinflationarypressuresonnon-discretionaryitems,includingfood,fueland

shelter, reduceour customers' discretionary incomeand theirwillingness to purchasediscretionary items

such as apparel, shoes or jewelry products. Any reduction in our customers' discretionaryspending on our

productscoulderodeoursalesvolumeandadverselyaffectourresultsofoperationsandfinancial

condition.

The operation of our sourcing offices in Asia presents increased operational andlegal risks.

In October 2014, we established our own sourcing offices in Asia. If our sourcing offices are unable to

successfully overseemerchandise productiontoensure thatproduct isproduced ontimeandwithin the

Company'sspecifications,ourbusiness,brand,reputation,costs,resultsofoperationsandfinancial

condition could be materially and adversely affected.

In addition, the current business environment, including geopolitical issues, make operating incertain

Asianmarketschallenging.Totheextentweexploreothercountriestosourceourproductorexplore

increasingtheamountofproductsourcedfromcurrentcountries,wemaybesubjecttoadditional

increasedlegalandoperational risksassociatedwithdoingbusinessinnewcountriesorincreasing our

business in other countries.

Further, the activities conducted byour sourcing offices outside theUnited States subject us to foreign

operationalrisks,aswellasU.S.andinternationalregulationsandcompliancerisks,asdiscussed

elsewhereinthis"RiskFactors"section,inparticularbelowunder"RiskFactors-RisksRelatingto

AccountingandLegalMatters-Ourbusinessoperationssubjectustolegalcomplianceandlitigation

risks, as well as regulations and regulatory enforcement priorities, which could result in increased costs or

liabilities,divertourmanagement'sattentionorotherwiseadverselyaffectourbusiness,resultsof

operations and financial condition."

Extreme weather, natural disasters, impacts of climate change, public health threats or similar

events have and may continue to adversely affect our sales or operations from timeto time.

Extremechangesinweather,naturaldisasters,physicalimpactsofclimatechange,publichealth

threats orsimilar eventscan influencecustomer trendsand shoppinghabits. Forexample, heavyrainfall

or other extreme weather conditions, including butnot limited to winter weather over aprolonged period,

mightmakeitdifficultforourcustomerstotraveltoourstoresandtherebyreduceoursalesand

profitability.Our business isalso susceptible tounseasonable weather conditions. Forexample, extended

periods of unseasonablywarm temperatures during thewinter season orcool weather duringthe summer

season canrender aportion ofour inventoryincompatible withthose unseasonableconditions. Reduced

salesfrom extremeorprolonged unseasonableweatherconditionswouldadversely affectourbusiness.

The occurrence orthreat of extremeweather, naturaldisasters, power outages, terroristacts, outbreaks of

fluorothercommunicablediseases(suchasCOVID-19)orothercatastrophiceventscouldreduce

customertrafficinourstoresandlikewisedisruptourabilitytoconductoperations,whichwould

materially and adversely affect us and could adversely affect our reputation and results of operations.

The inability of third-party vendors to produce goods on time and to theCompany's specifications

may adversely affect the Company's business, results of operations and financial condition.

Ourdependenceonthird-partyvendorstomanufactureandsupplyourmerchandisesubjectsusto

numerous risks that our vendors will fail to perform as we expect. For example, the deterioration in any of

our keyvendors' financial condition,their failure toship merchandise ina timely mannerthat meetsour

specifications,orotherfailurestofollowourvendorguidelinesorcomplywithapplicablelawsand

regulations,includingcompliantlabor,environmentalpracticesandproductsafety,couldexposeusto

operational, quality,competitive, reputationaland legalrisks. Ifwe arenot ableto timelyoradequately

replace the merchandise we currentlysource with merchandise produced elsewhere,or if our vendors fail

toperform asweexpect,ourbusiness, resultsofoperationsandfinancialconditioncouldbeadversely

affected.ActivitiesconductedbyusoronourbehalfoutsidetheUnitedStatesfurthersubjectusto

numerousU.S.andinternationalregulationsandcompliancerisks,asdiscussedbelowunder"Risk

Factors -Risks Relatingto Accountingand LegalMatters -Our businessoperations subjectus tolegal

compliance and litigationrisks, as wellas regulations andregulatory enforcement priorities, whichcould

result in increased costs or liabilities,divert our management's attentionor otherwise adversely affect our

business, results of operations and financial condition."

Existing and increased competition in the women's retail apparel industry may negatively impact

our business, results of operations, financial condition andmarket share.

Thewomen'sretailapparelindustryishighlycompetitive.Wecompeteprimarilywithdiscount

stores,massmerchandisers,departmentstores,off-priceretailers,specialtystoresandinternet-based

retailers, many of which have substantially greater financial, marketing and other resourcesthan we have.

Manyofourcompetitorsofferfrequentpromotionsandreducetheirsellingprices.Insomecases,our

competitors areexpanding into marketsin whichwe have asignificant market presence.In addition, our

competitorsalsocompeteforthesameretailstorespace.Asaresultofthiscompetition,wemay

experiencepricingpressures,increasedmarketingexpenditures,increasedcoststoopennewstores,as

wellaslossofmarketshare,whichcouldmateriallyandadverselyaffectourbusiness,resultsof

operations and financial condition.

If we are unable to anticipate, identify and respond to rapidly changingfashion trends and

customer demands in a timely manner, our business and results of operations could materially

suffer.

Customertastesandfashiontrends,particularlyforwomen'sapparel,arevolatile,tendtochange

rapidlyandcannotbepredictedwithcertainty.Oursuccessdependsinpartuponourabilityto

consistently anticipate, design and respond to changing merchandise trends and consumer preferences in a

timelymanner.Accordingly,anyfailurebyustoanticipate,identify,designandrespondtochanging

fashiontrendscouldadverselyaffectconsumeracceptanceofourmerchandise,whichinturncould

adversely affect ourbusiness, results ofoperations and ourimage with ourcustomers. If wemiscalculate

either themarket forour merchandiseor ourcustomers' tastes orpurchasing habits, wemay be required

to sell a significant amount of inventory at below-average markups overcost, or below cost, which would

adversely affect our margins and results of operations.

Adverse developments affecting the financial services industry or events or concernsinvolving

liquidity, defaults or non-performance by financial institutions or transactional counterparties

could adversely affect our business, financial condition or results of operations.

Actualeventsinvolving limitedliquidity,defaults,non-performance orotheradversedevelopments

that affectfinancial institutions,transactional counterpartiesor othercompanies inthe financialservices

industryorthefinancialservicesindustrygenerally,orconcernsorrumorsaboutanyeventsofthese

kindsorothersimilarrisks,haveinthepastandmayinthefutureleadtosporadicormarket-wide

liquidity problemsthatcould adverselyaffectus. Ifany ofour transactionalcounterparties, suchasour

merchandise vendorsand theirfactors, ourlandlords, ourpayment processorsincluding creditcard, gift

card and checks, our transportation vendors and other vendors that provide services and supplies to us, are

unable toaccess fundsor lendingarrangements withsucha financialinstitution, suchparties' abilityto

pay their obligationscould be adverselyaffected. If thisoccurred we couldbe adversely impactedby not

receivingtheproductweorderedorthepaymentsgeneratedbyoursales,bynotbeingabletoreceive

products to our distribution center orour stores in a timelymanner or at all, orby not being able toretain

servicesfrom thirdparties thatwerequire. Theseimpactsmay adverselyaffectourfinancial condition,

resultsofoperationsandourabilitytoexecuteourbusinessstrategy.Furthermore,theseadverse

developments affectingthefinancial servicesindustry orrelated perceptionsmay negativelyimpact our

customers'discretionaryincomeorourcustomers'willingnesstopurchaseapparel,shoesorjewelry

products. Anyreduction inour customers'discretionary spendingon ourproducts coulderode oursales

volume and adversely affect our results of operations and financial condition.

Risks Relating to Our Information Technology, Related Systems and Cybersecurity:

A failure or disruption relating to our information technology systems couldadversely affect our

business.

Werelyonourexistinginformationtechnologysystemsformerchandiseoperations,including

merchandise planning,replenishment, pricing, ordering,markdowns andproduct lifecycle management.

In addition tomerchandise operations, we utilizeour information technology systems forour distribution

processes,aswellasourfinancialsystems,includingaccountspayable,generalledger,accounts

receivable,sales, banking,inventoryandfixedassets. Despitetheprecautions wetake,ourinformation

systems are or may be vulnerable to disruptionor failure from numerous events, including but not limited

to, natural disasters,severe weather conditions,power outages, technical malfunctions,cyberattacks, acts

ofwarorterrorism,similarcatastrophiceventsorothercausesbeyondourcontrolorthatwefailto

anticipate. Any disruption or failure in the operation of our information technology systems, our failure to

continuetoupgradeorimprovesuchsystems,orthecostassociatedwithmaintaining,repairingor

improvingthesesystems,couldadverselyaffectourbusiness,resultsofoperationsandfinancial

condition. Modifications and/or upgrades toour current information technology systems may alsodisrupt

our operations.

A disruption or shutdown of our centralized distribution centeror transportation network could

materially and adversely affect our business and results of operations.

The distributionof ourproducts is centralizedin onedistribution center inCharlotte, North Carolina

anddistributedthroughournetworkofthird-partyfreightcarriers.Themerchandisewepurchaseis

shipped directly toour distribution center,where it isprepared for shipmentto the appropriatestores and

subsequentlydeliveredtothestoresbyourthird-partyfreightcarriers.Ifthedistributioncenterorour

third-party freight carriers wereto be shut downor lose significant capacityfor any reason, including but

not limited to, any of the causes described above under "A failure or disruptionrelating to our information

technologysystemscouldadverselyaffectourbusiness,"ouroperationswouldlikelybeseriously

disrupted. Such problems could occur asthe result of any loss,destruction or impairment of our ability to

useourdistribution center,aswellasany broaderproblem generallyaffectingthe abilitytoshipgoods

into our distribution centeror deliver goods toour stores. Asa result, wecould incur significantly higher

costs and longer leadtimes associated with distributing ourproducts to our storesduring the time ittakes

for us to reopen orreplace the distribution center and/or our transportation network. Any suchoccurrence

could adversely affect our business, results of operations and financial condition.

A security breach that results in unauthorized access to or disclosureof employee, Company or

customer information or a ransomware attack could adversely affect our costs,reputation and

results of operations, and efforts to mitigate these risks may continue to increaseour costs.

Theprotectionofemployee,CompanyandcustomerdataiscriticaltotheCompany.Anysecurity

breach, mishandling, human or programming error or other event that results in the misappropriation, loss

orotherunauthorizeddisclosureofemployee,Companyorcustomerinformation,includingbutnot

limitedtocreditcarddataorotherpersonallyidentifiableinformation,couldseverelydamagethe

Company's reputation, expose it toremediation and other costsand the risks of legalproceedings, disrupt

itsoperationsandotherwiseadverselyaffecttheCompany'sbusinessandfinancialcondition.The

security of certain ofthis information also depends onthe ability of third-partyservice providers, such as

thoseweusetoprocesscreditanddebitcardpaymentsasdescribedbelowunder"Wearesubjectto

payment-relatedrisks,"toproperlyhandleandprotectsuchinformation.Ourinformationsystemsand

those of ourthird-party service providers aresubject to ongoing andpersistent cybersecurity threats from

those seeking unauthorizedaccess through meanswhich arecontinually evolving andmay be difficultto

anticipate or detectfor long periodsof time. Despitemeasures the Companytakes toprotect confidential

information againstunauthorized accessor disclosure, whichmeasures areongoing andmay continueto

increaseourcosts,thereisnoassurancethatsuchmeasureswillpreventthecompromiseofsuch

information. Ifour measuresare unsuccessfuldue tocyberattacks orotherwise, itcould havea material

adverseeffectontheCompany'sreputation,business,operatingresults,financialconditionandcash

flows. In addition, the Company may be subject to ransomware attacks, which if successful couldresult in

disruptionstotheCompany'soperationsandexposeittoremediationandothercosts,risksoflegal

proceedings,damage theCompany'sreputationandotherwiseadverselyaffecttheCompany's business

and financial condition.

The Company's failure to successfully operate its e-commerce websites or fulfill customer

expectations could adversely impact customer satisfaction, our reputationand our business.

Although theCompany's e-commerceplatform providesanother channeltodrive incrementalsales,

expose existing customers withthe online shopping experienceand introduce a newcustomer base to the

Company,italso exposesus tonumerous risks.Wearesubject topotential failuresin theefficientand

uninterruptedoperationofourwebsites,customercontactcenterorourdistributioncenter,including

systemfailurescausedbytelecommunicationorsoftwaresystemproviders,ordervolumesthatexceed

ourpresentsystemcapabilities,electricaloutages,mechanicalproblemsandhumanerror.Oure-

commerceplatformmayalsoexposeustogreaterpotentialforsecurityordatabreachesinvolvingthe

unauthorizedaccesstoordisclosureofcustomerinformation,asdiscussedaboveunder"Asecurity

breachthatresultsinunauthorizedaccesstoordisclosureofemployee,Companyorcustomer

information or a ransomwareattack could adversely affectour costs, reputation andresults of operations,

and efforts tomitigate these risksmay continue to increaseour costs." Weare also subjectto risk related

todelaysorfailuresintheperformanceofthirdparties,suchasshippingcompanies,includingdelays

associatedwithlaborstrikesorslowdownsoradverseweatherconditions.IftheCompanydoesnot

successfullymeetthechallengesofoperatinge-commercewebsitesorfulfilling customerexpectations,

the Company's business and sales could be adversely affected.

We are subject to payment-related risks.

Weacceptpaymentsusingavarietyofmethods,includingthird-partycreditcards,"buynow,pay

later"services,ourownbrandedcreditcard,debitcards,giftcardsandphysicalandelectronicbank

checks. Forexisting and futurepayment methods weoffer toour customers, weare subjectto fraudrisk

and to additionalregulations and compliancerequirements (including obligations toimplement enhanced

authentication processes that could result in increased costsand reduce the ease of use ofcertain payment

methods). Forcertain paymentmethods, includingcredit anddebit cards,we payinterchange andother

fees,whichhaveincreasedfromtimetotimeandmaycontinuetoincreaseovertime,raisingour

operatingcostsandloweringprofitability.Werelyonthird-partyserviceprovidersforpayment

processing services,including theprocessing ofcredit anddebit cards.In eachcase, itcould disruptour

business if these third-party service providersbecome unwilling or unable to providethese services to us.

We are also subject to payment card association operating rules, including data security rules, certification

requirementsandrulesgoverningelectronicfundstransfers,whichcouldchangeorbereinterpretedto

make it difficultor impossible forus to comply.If we failto comply withthese rules orrequirements, or

if our data securitysystems are breached or compromised,we may be liable forcard-issuing banks' costs

and subjectto finesand higher transactionfees. In addition,we may loseour ability toaccept creditand

debit card payments fromour customers andprocess electronic funds transfers orfacilitate other types of

payments, and our business and operating resultscould be adversely affected.

We are exposed to risks related to the use ofAI by us and our competitors.

Weareexploringincorporatingartificialintelligence(AI)capabilitiesintothedevelopmentof

technologies,ourbusinessoperationsandourmerchandise.AItechnologyiscomplexandrapidly

evolvingandmaysubjectustosignificantcompetitive,legal,regulatory,operationalandotherrisks.

There is no guarantee that our use of AI will enhance our technologies, benefit our business operations, or

produceapparelandaccessoriesthatarepreferredbyourcustomers.Ourcompetitorsmaybemore

successful in their AIstrategy and developsuperior products withthe aid of AItechnology. Additionally,

AI algorithms ortraining methodologies may beflawed, and datasetsmay contain irrelevant,insufficient

or biased information, which cancause errors in outputs. This may giverise to legal liability,damage our

reputation, and materially harm our business. The use of AI in the development of our products could also

causelossofintellectualproperty,aswellassubjectustorisksrelatedtointellectualproperty

infringement ormisappropriation, dataprivacy andcybersecurity. TheUnited Statesand othercountries

may adopt lawsand regulations relatedto AI. These lawsand regulations couldcause usto incurgreater

compliancecostsandlimittheuseof AIinthedevelopmentofourproducts. Anyfailureorperceived

failure by us to comply with these regulatory requirements could subject us to legalliabilities, damage our

reputation, or otherwise have a material and adverse impact on our business.

Risks Relating to Accounting and Legal Matters:

Our business operations subject us to legal compliance and litigation risks,as well as regulations

and regulatory enforcement priorities, which could result in increasedcosts or liabilities, divert our

management's attention or otherwise adversely affect our business, results of operations and

financial condition.

Our operationsare subjectto federal,state andlocal laws,rules andregulations, aswell asU.S. and

foreignlawsandregulationsrelatingtoouractivitiesinforeigncountriesfromwhichwesourceour

merchandise and operate our sourcing offices. Our business is also subject to regulatory and litigation risk

in all of thesejurisdictions, including foreign jurisdictions that maylack well-established or reliable legal

systems for resolving legal disputes. Compliance risks and litigation claims havearisen and may continue

toariseintheordinarycourseofourbusinessandinclude,amongotherissues,intellectualproperty

issues,employmentissues,commercialdisputes,product-orientedmatters,tax,customerrelationsand

personal injuryclaims. Internationalactivities subjectus tonumerous U.S.and internationalregulations,

includingbutnotlimitedto,restrictionsontrade,licenseandpermitrequirements,importandexport

licenserequirements,privacyanddataprotectionlaws,environmentallaws,recordsandinformation

management regulations, tariffsand taxesand anti-corruptionlaws, violationsof whichby employees or

persons actingon theCompany'sbehalf mayresultin significantinvestigation costs,severe criminalor

civilsanctionsandreputationalharm.Theseandotherliabilitiestowhichwemaybesubjectcould

negativelyaffectourbusiness,operatingresultsandfinancialcondition.Thesemattersfrequentlyraise

complex factual andlegal issues, whichare subject torisks and uncertaintiesand could divertsignificant

managementtime.TheCompanymayalsobesubjecttoregulatoryreviewsandaudits,theresultsof

which could materially and adverselyaffect our business, results ofoperations and financial condition. In

addition, governing laws,rules and regulations,and interpretations ofexisting laws aresubject to change

from time to time.Compliance and litigation matters could resultin unexpected expenses and liability,as

well as have an adverse effect on our operations and our reputation.

Newlegislationorregulationandinterpretationofexistinglawsandregulations,includingthose

related todata privacy,AI orsustainability matters,could increaseourcosts ofcompliance, technology

and businessoperations. Theinterpretation ofexisting ornew lawstoexisting andevolving technology

and business practices can be uncertain and may lead to additional compliancerisk and cost.

Maintaining and improving our internal control over financial reportingand other requirements

necessary to operate as a public company may strain our resources, andany material failure in

these controls may negatively impact our business, the price of our commonstock and market

confidence in our reported financial information.

As a publiccompany, weare subject tothe reporting requirements ofthe Securities ExchangeAct of

1934, theSarbanes-Oxley Actof 2002,the rulesof theSEC andNew YorkStock Exchangeand certain

aspects of the Dodd-Frank WallStreet Reform and Consumer Protection Act (the "Dodd-Frank Act") and

related rule-making thathas been andmay continue tobe implemented overthe next severalyears under

the mandates of the Dodd-Frank Act. Therequirements of these rules and regulations have increased, and

may continue to increase, our compliance costs andplace significant strain on our personnel, systems and

resources.TosatisfytheSEC'srulesimplementingtherequirementsofSection404oftheSarbanes-

Oxley Actof2002, wemust continuetodocument, test,monitor andenhance ourinternal controlover

financial reporting, which isa costly and time-consuming effortthat must be re-evaluatedfrequently. We

cannot giveassurance thatour disclosurecontrols andprocedures andour internalcontrol overfinancial

reporting, asdefined by applicableSEC rules,will be adequatein the future.Any failureto maintain the

effectivenessofinternalcontroloverfinancialreportingortocomplywiththeothervariouslawsand

regulations towhich weare andwill continueto besubject, ortowhich wemay becomesubject inthe

future,asapubliccompanycouldhaveanadversematerialimpactonourbusiness,ourfinancial

condition andthe priceof ourcommon stock.In addition,our effortsto complywith theseexisting and

new requirements could significantly increase our compliance costs.

Adverse litigation matters may adversely affect our business and our financialcondition.

FromtimetotimetheCompanyisinvolvedinlitigationandotherclaimsagainstourbusiness.

Primarily these arise in thenormal course of business but aresubject to risks and uncertainties, andcould

requiresignificantmanagementtime.TheCompany'speriodicassessmentoflitigation-relatedmatters

may change in light of the discovery of facts not presently known to us or determinations byjudges, juries

or other finders of fact. Wemay also be subjected to legal matters not yet known to us. Adversedecisions

or settlements of disputes may negatively impact our business, reputationand financial condition.

If we fail to protect our trademarks and other intellectual propertyrights or infringe the

intellectual property rights of others, our business, brand image,growth strategy, results of

operations and financial condition could be adversely affected.

Webelievethatour"Cato","It'sFashion","It'sFashionMetro","Versona","Cache"and"Body

Central"trademarksareintegraltoourstoredesigns,brandrecognitionandourabilitytosuccessfully

buildconsumerloyalty.AlthoughwehaveregisteredthesetrademarkswiththeU.S.Patentand

Trademark Office("PTO") andhave alsoregistered, orapplied forregistration of,additional trademarks

withthePTOthatwebelieveareimportanttoourbusiness,wecannotgiveassurancethatthese

registrationswillpreventimitationofourtrademarks,merchandisingconcepts,storedesignsorprivate

label merchandise orthe infringement ofour other intellectualproperty rights byothers. Infringement of

ournames,concepts,storedesignsormerchandisegenerally,orparticularlyinamannerthatprojects

lesser quality or carries a negative connotation ofour image could adversely affect our business, financial

condition and results of operations.

TheCompanyisfromtimetotimesubjecttoclaimsthatitsproducts,processes,advertising,or

trademarksinfringetheintellectualpropertyrightsofothers.Thedefenseoftheseclaims,evenif

ultimately successful, may result in costly litigation,and if the Company is not successful in its defense, it

could be subject toinjunctions and liability fordamages or royalty obligations,and the Company'ssales,

profitability, cash flows, financial condition and reputation could be adversely affected.

Changes to accounting rules and regulations may adversely affect our reportedresults of

operations and financial condition.

ChangestoU.S.GenerallyAcceptedAccountingPrinciplesandSECaccounting,disclosureand

reporting rulesand regulationsarecommon andhave becomemore frequentand significantinthepast

severalyears.Changesinaccountingrules,disclosuresorregulationsandvaryinginterpretationsof

existingaccountingrules,disclosuresandregulationshavesignificantlyaffectedourreportedfinancial

statements andthose ofother participantsin theretail industryin thepast andmay continueto doso in

thefuture.Futurechangestoaccountingrules,disclosuresorregulationsmayadverselyaffectour

reportedresultsofoperationsandfinancialpositionorperceptionsofourperformanceandfinancial

condition.

Changes in tax and accounting laws and the mix and level of earningsin any of the jurisdictions in

which we operate and the outcome of tax audits can cause fluctuations in our overalltax rate,

which impact our reported earnings.

Weare subject to incometaxes in theUnited States and numerousdomestic states, as wellas foreign

jurisdictions. Inaddition, ourproducts aresubject toimport andexcise dutiesand/or sales,consumption

or value-added taxes in many jurisdictions. Significant judgment is required to determine and estimate tax

liabilities,andtherearemanytransactionsandcalculationswheretheultimatetaxdeterminationis

uncertain. Werecord taxexpense basedon ourestimates offuture payments,which includereserves for

estimates of probable settlements of domesticand foreign tax audits. At anyone time, many tax years are

subjecttoauditbyvarioustaxingjurisdictions.Adversedeterminationsintheseauditsmayhavean

adverse effecton ourreported financial resultsin theperiod suchdeterminations aremade, aswell asin

future periods.In addition, oureffective taxrate may bematerially impacted bychanges in taxrates and

duties,themixandlevelofearningsorlossesbytaxingjurisdictions,orbychangestoexisting

accounting rulesorregulations. Asa result,weexpectthat throughouttheyear therecouldbeongoing

variability inour quarterlytax ratesas eventsoccur andexposures areevaluated. Changesto foreignor

domestic taxand accounting lawsand regulations, theoutcome oftax audits andchanges in themix and

levelofearningsbyjurisdictionscouldhaveamaterialimpactonoureffectivetaxrate,financial

condition, results of operations or cash flows.

Continued scrutiny and changing expectations surrounding sustainabilitymatters from investors,

customers, government regulators and other stakeholders may impose additionalreporting

requirements, additional costs and compliance risks.

Public companiesfrom acrossall industrieshave andmay continuetoface scrutinyfrom investors,

customers,regulatorsandotherstakeholdersconcerningsustainabilitymatters.IntheU.S.,therehave

beennumerousinitiativesatthefederalandstateleveltoimposeneworenhanceddisclosure

requirementsregardingclimateemissions,sustainability,workforcecompositionandrelatedmetrics,

among othertopics. Complyingwith thesecomplex reportingobligations orexpectations couldincrease

ourcosts associatedwith compliance,disclosure andreporting. Furthermore,evolving laws,regulations

orstakeholderexpectationsmayresultinuncertain,potentiallyburdensome,andchangingreporting

requirementsorexpectations,andourfailuretocomplywithsuchrequirementsorexpectationsmay

adversely affect our reputation, business or financial performance.

Risks Relating to Our Investments and Liquidity:

We may experience market conditions or other events that could adversely impact the valuation

and liquidity of, and our ability to access, our short-term investments,cash and cash equivalents

and our revolving line of credit.

Ourshort-term investmentsand cashequivalents areprimarily comprisedof investmentsinfederal,

state, municipal and corporate debt securities. The value of those securities may be adversely impacted by

factorsrelatingtothesesecurities,similarsecuritiesorthebroadercreditmarketsingeneral.Manyof

these factorsare beyond ourcontrol, and includebut arenot limited tochanges to creditratings, rates of

default, collateralvalue, discountrates, andstrength andquality ofmarket creditand liquidity,potential

disruptions in the capitalmarkets and changes in theunderlying economic, financial andother conditions

that drivethese factors.As federal,state andmunicipal entitiesstruggle withdeclining taxrevenues and

budget deficits,we cannotbe assuredof ourability totimely accessthese investmentsif themarket for

these issuesdeclines. Similarly,the defaultby issuersof thedebt securitieswe holdor similarsecurities

couldimpairthevalueorliquidity ofourinvestments.Thedevelopmentorpersistence ofanyofthese

conditions couldadversely affectour financialcondition, resultsof operationsand abilityto executeour

businessstrategy.Inaddition,wehavesignificantamountsofcashandcashequivalentsatfinancial

institutions thatarein excessofthe federallyinsured limits.An economicdownturn ordevelopment of

adverseconditionsaffectingthefinancialsectorandstabilityoffinancialinstitutionscouldcauseusto

experience losses on our deposits.

Our abilityto accesscredit marketsand ourrevolving lineof credit,either generally oron favorable

market terms, may beimpacted by thefactors discussed inthe preceding paragraph, aswell as continued

compliance with covenants underour revolving credit agreement. Thedevelopment or persistence ofany

of theseadverse factors orfailure tocomply with covenantson which ourborrowing is conditionedmay

adversely affectour financialcondition, results ofoperations andour abilityto accessour revolvingline

of credit and to execute our business strategy.

The terms of our asset-based revolving credit facility ("ABLFacility") restrict our operations and

financial flexibility, which could adversely affect our ability to respond to changes in our business

and to manage our operations.

WearesubjecttotheborrowingtermsofourABLFacility,whichislimitedbyaborrowingbase

consisting of certain eligible accountsreceivable and eligible inventory,reduced by specified reserves, as

follows:

●

90% of eligible credit card receivables, plus

●

90% of thenet recovery percentageof eligible inventorymultiplied by themost recent appraised

value of such inventory, calculated at the lower of (a) cost computed on a first-in first-out basis or

(b) market value (net of intercompany profits and certain other adjustments),minus

●

applicable reserves.

Inaddition,theABL Facilityprohibitsminimum excessavailability atany timetobeless thanthe

greater of(i) 10%of theloan cap(defined asthe lesserof (A)the borrowingbase atsuch timeand (B)

$35 million (as of the date hereof)) and (ii) $5 million.

In addition, the covenants underour ABL Facility includerestrictions that, among other things,limit

our abilityto incuradditional indebtedness,create lienson assets,make investments,loans oradvances,

engage in mergers, consolidations, sell assets,make acquisitions, pay dividends and make other restricted

payments, and enter into transactions with affiliates. A failure by us to comply with these covenants could

resultinaneventofdefault,whichcouldadverselyaffectourabilitytorespondtochangesinour

business andmanage ouroperations. Upon theoccurrence ofan eventof default,the lenderscould elect

to declare allamounts outstanding tobe immediately dueand payable andexercise other remediesas set

forth underour ABLFacility,including withoutlimitation foreclosingon thecollateral pledgedtosuch

lenders. Ifthe indebtednessunder ourABL Facilitywas tobe accelerated,our futurefinancial condition

could be materially adversely affected.

Risks Relating to the Market Value of Our Common Stock:

The interests of our principal shareholder may limit the ability of othershareholders to influence

the direction of the Company and otherwise affect our corporate governance andthe market price

of our common stock.

Our common stockconsists of twoclasses: ClassA andClass B.Holders ofClass A commonstock

are entitled to one vote per share, and holders of Class B common stock are entitled to10 votes per share,

on all matters to be voted on by our common shareholders. All of the shares of Class B common stock are

beneficially owned byJohn P.D. Cato. Asa result, Mr.Cato owns asignificant economic interest inthe

Company andthemajorityofthetotalvotingpowerofouroutstandingcommonstockat53.3%asof

March23,2026.Inaddition,Mr.CatoservesasChairmanoftheBoardofDirectors,Presidentand

Chief ExecutiveOfficer.As aresult, Mr.Cato hasthe abilityto substantiallyinfluence ordetermine the

outcome of allmatters requiring approval bythe shareholders, including theelection of directorsand the

approvalofmergersandotherbusinesscombinationsorothersignificantCompanytransactions.Mr.

Cato mayhave intereststhat differfrom thoseof othershareholders andmay votein away withwhich

othershareholders disagreeorperceive asadverse totheirinterests. Theconcentration ofvoting power

held byMr.Cato coulddiscourage potentialinvestors fromacquiring ourcommon stockand couldalso

have theeffect ofpreventing, discouraging ordeferring achange incontrol ofthe Company,even ifthe

change incontrol mightbenefit theshareholders generally.This ownershipconcentration may adversely

impact the tradingof ourClass A common stockbecause ofperceptions of aconflict of interest,thereby

depressingthevalueofourClassAcommonstock.Mr.Catoalsohastheabilitytocontrolthe

management ofthe Companyas aresultof hisposition asChief ExecutiveOfficer.Further,we qualify

forexemptionasa"controlledcompany"fromcompliancewithcertainNewYorkStockExchange

corporategovernancelistingstandards,includingtherequirementsthatwehaveamajorityof

independentdirectorsonourBoard,anindependentcompensationcommitteeandanindependent

corporategovernanceandnominatingcommittee.Althoughwecurrentlyintendtocontinuetocomply

with these listingstandards even thoughwe are acontrolled company,there can beno assurance thatwe

will continueto complywith theseoptional listingstandards inthe future.If weelected toutilize these

"controlledcompany"exceptions,ourothershareholderscouldlosethebenefitofthesecorporate

governance requirements and the market value of our commonstock could be adversely affected.

Our operating results are subject to seasonal and quarterly fluctuations,which could adversely

affect the market price of our common stock.

Our businessvaries withgeneral seasonaltrends thatare characteristicof theretail apparelindustry.

As aresult, ourstores typicallygenerate ahigher percentageof ourannual netsales andprofitability in

thefirstandsecondquartersofourfiscalyearcomparedtootherquarters.Accordingly,ouroperating

results forany onefiscal periodare notnecessarily indicativeof resultstobe expectedfrom anyfuture

period,andsuchseasonalandquarterlyfluctuationscouldadverselyaffectthemarketpriceofour

common stock.

We cannot provide assurance that we will pay dividends, or that if paid, any dividend payments will

be consistent with historical levels.

The declaration and payment of any dividend is subject to the approval of our Board of Directors.Our

Board ofDirectors regularlyevaluatesour abilitytopay adividend basedon manyfactors,such asbut

notlimitedto,applicablelegalrequirements,thefinancialpositionoftheCompany,contractual

restrictionsandourcapitalallocationstrategy.OurBoardofDirectorsmostrecentlysuspendedthe

payment of quarterly dividends in November 2024 and may continue to suspend the paymentof dividends

if it deems such an action tobe in the best interests of theCompany and its shareholders. There can be no

assurance that a cash dividend will be declared in the future in any particularamount, or at all.

Conditions in the stock market generally, or particularly relating to our industry, Company or

common stock, may materially and adversely affect the market price of ourcommon stock and

make its trading price more volatile.

The tradingprice ofour commonstock attimes hasbeen, andis likelyto continueto be,subject to

significant volatility.A variety offactors may causethe priceof ourcommon stock tofluctuate, perhaps

substantially,including,butnotlimitedto,thosediscussedelsewhereinthisreport,aswellasthe

following: lowtrading volume;general marketfluctuations resultingfrom factorsnot directlyrelated to

our operations or the inherent value ofour common stock; announcements of developments related to our

business; fluctuations in our reported operating results; general conditions or trends affecting or perceived

to affectthe fashion andretail industry; conditions ortrends affecting orperceived to affectthe domestic

or globaleconomy orthe domesticor globalcredit orcapital markets;changes infinancial estimatesor

the scopeof coveragegiven toour Companyby securitiesanalysts; negativecommentary regardingour

Companyandcorrespondingshort-sellingmarketbehavior;adversecustomerrelationsdevelopments;

significant changes in our senior management team; and legal proceedings.Over the past several years the

stock market in general, and the market for shares of equity securities of many retailers in particular,have

experienced extreme pricefluctuations thathave at timesbeen unrelated tothe operatingperformance of

those companies.Such fluctuationsand marketvolatility basedon theseor otherfactors maymaterially

and adverselyaffect themarket priceof ourcommon stock.Further,securities classaction litigationhas

oftenbeeninitiatedagainstcompaniesfollowingperiodsofvolatilityintheirstockprice.Thistypeof

litigation,shoulditmaterialize,couldresultinsubstantialcostsanddivertourmanagement'sattention

andresources,andcouldalsorequireustomake substantialpaymentstojustifyjudgmentsortosettle

litigation. The threat of class action litigation could also cause the price ofour common stock to decline.

Item 1B.

Unresolved Staff Comments:

Not applicable.

Item 1C.

Cybersecurity:

Risk Management Strategy

Werecognizetheimportanceofeffectivelymanagingcybersecurityriskinprotectingourbusiness,

customersandemployees,andwe

manage

cybersecurityriskaspartofouroverallriskmanagement

strategyandcomplianceprocesses.Wemaintainaprocessdesignedtoidentify,assessandmanage

materialrisksfromcybersecuritythreats,includingrisksrelatingtotheftofcustomerdata,primarily

payment cards, disruption tobusiness operations or financialreporting systems, fraud, extortion,external

exposureofemployeedataandviolationofprivacylaws.Inrecentyears,wehaveincreasedour

investmentsincybersecurity riskmanagement andhave developedanenterprise cybersecurityprogram

designedtodetect,identify,classifyandmitigatecybersecurityandotherdatasecuritythreats.This

program classifies potentialthreats by risklevels, and wetypically prioritize ourthreat mitigation efforts

based on those risk classifications. In the event we identify a potential cybersecurity, privacy or other data

securityissue,wehavedefinedproceduresforrespondingtosuchissues,includingproceduresthat

addresswhen andhow toengage withCompany executives,ourBoard ofDirectors, otherstakeholders

and lawenforcement whenresponding tosuch issues.Additionally,various aspectsof ourcybersecurity

program,particularlycompliancewiththePaymentCardIndustrystandards,areregularlyreviewedby

independentthirdparties.Wealsomaintaincybersecurityinsurance,whichwebelievetobe

commensuratewithoursizeandthenatureofouroperations,aspartofourcomprehensiveinsurance

portfolio.

utilize

third-partyintrusiondetectionandpreventionsystemsandvulnerabilityandpenetration

testing tomonitor ourenvironment. Wealso use

third-party

software totest ouremployees' responses to

suspicious emails and toinform targeted cyberawareness training.Our information security andprivacy

policiesareinformedbyregulatoryrequirementsandarereviewedperiodicallyforcomplianceand

alignmentwithcurrentstateandfederallawsandregulations.Wecomplywithapplicableindustry

securitystandards,including thePayment CardIndustryDataSecurityStandard ("PCIDSS").Because

weareawareoftherisksassociatedwiththird-partyserviceproviders,wealsohaveimplemented

processestooverseeand managetheserisks.Weconductsecurityassessmentsofthird-partyproviders

beforeengagementandmaintain ongoingmonitoring tohelpensurecompliance withourcybersecurity

standards.

Additionally,we maintain andregularly review acybersecurity incident responseplan thatprovides a

framework forhandling andescalating cybersecurityincidents basedon theseverity ofthe incidentand

facilitates cross-functional coordination across the Company.

Through theprocesses describedabove,wedid

not

identifyrisksduring theyearended January31,

2026 from current orpast cybersecurity threats or cybersecurityincidents that have materially affectedor

arereasonablylikelytomateriallyaffectourbusinessstrategy,resultsofoperations,orfinancial

condition.However,wefaceongoingrisksfromcertaincybersecuritythreatsthat,ifrealized,are

reasonably likelytomaterially affectourbusiness strategy,resultsofoperations, orfinancial condition.

Seetheriskfactorsdiscussedundertheheading,"RiskFactors-RisksRelatingtoOurInformation

Technology,Related Systems and Cybersecurity" for further information.

Governance

OurBoardofDirectorsrecognizestheimportantrolesthatinformationsecurityandmitigating

cybersecurity and other data security threatsplay in our effortsto protect and maintain theconfidentiality

and security ofcustomer, employee andvendor information, aswell as non-publicinformation about our

Company.

AlthoughtheBoardasawholeisultimately

responsible

fortheoversightofourrisk

managementfunction,theBoardhasdelegatedtoitsAuditCommitteeprimaryresponsibilityfor

oversightofriskassessmentandriskmanagement,includingrisksrelatedtocybersecurityandother

technologyissues.TheAuditCommitteealsooverseestheCompany'sinternalcontroloverfinancial

reporting, includingwith respectto financialreporting-related informationsystems. TheChief Financial

Officer (CFO) and ChiefAccounting Officer (CAO) meet regularlywith the Audit Committee andBoard

of Directors.

TheAuditCommitteereviewsquarterlyourcybersecurityactivities,includingreviewofannual

external assessmentresults, trainingresults, anddiscussion ofcybersecurity risksand resolutions,and is

responsible

for elevating significantmatters to theBoard as eventsarise.

The AuditCommittee receives

reportsfromourChiefInformationOfficer(CIO)annuallyregardingourcybersecurityframework,as

well as our plans to mitigate cybersecurity risks and respond to any data breaches.

Fromamanagementperspective,ourenterprisecybersecurityisoverseenbyourcybersecurity

committee, which is chaired by our CFOand includes our CAO, CIO, Chief InformationSecurity Officer

(CISO),aswellaskeymembersoffinancialmanagement,informationtechnologyandaudit.Our

cybersecurity infrastructureisoverseen byourCISO, whoreportstoourCIO.

OurCIO reportstoour

CFOandhasservedinvariousrolesininformationtechnologyandinformationsecurityforover30

years.

Item 2.

Properties:

The Company'sdistribution centerand generalofficesare locatedin aCompany-owned buildingof

approximately552,000squarefeetlocatedona15-acretractinCharlotte,NorthCarolina.The

Company'sautomatedmerchandisehandlinganddistributionactivitiesoccupyapproximately418,000

squarefeetofthisbuildinganditsgeneralofficesandcorporatetrainingcenterarelocatedinthe

remaining 134,000square feet.A buildingof approximately24,000 squarefeet locatedon a2-acre tract

adjacenttotheCompany'sexistinglocation isusedfore-commercestorage.TheCompany alsoowns

approximately 185 acres of land in York County,South Carolina.

Item 3.

Legal Proceedings:

From timeto time,claims areasserted againstthe Companyarising outof operationsin theordinary

courseofbusiness.TheCompanycurrentlyisnotapartytoanypendinglitigationthatitbelievesis

likely to have amaterial adverse effect onthe Company'sfinancial position, results ofoperations or cash

flows. See Note 15, "Commitments and Contingencies," for moreinformation.

Item 3A.

Executive Officers of the Registrant:

The executive officers of the Company and their ages as of March 25, 2026are as follows:

Name

Age

Position

John P.D. Cato............................

Chairman, President and Chief Executive Officer

Charles D. Knight........................

Executive Vice President, Chief Financial Officer

Gordon Smith..............................

Executive Vice President, Chief Real Estate and

Store Development Officer

John P.D. Cato

has been employedas an officerof the Company since1981 and hasbeen a director

oftheCompanysince1986.SinceJanuary2004,hehasservedasChairman,PresidentandChief

Executive Officer.From May 1999 toJanuary 2004, he servedas President, ViceChairman of theBoard

and Chief Executive Officer.From June 1997 to May 1999,he served as President, ViceChairman of the

Board andChief Operating Officer.From August 1996to June1997, he servedas ViceChairman of the

Boardand ChiefOperating Officer.From 1989to1996, hemanaged theCompany'soff-priceconcept,

servingasExecutive VicePresidentandasPresident andGeneral ManageroftheIt'sFashionconcept

from 1993toAugust 1996.Mr. Catoisa formerdirector ofHarris TeeterSupermarkets, Inc.,formerly

Ruddick Corporation.

CharlesD.Knight

hasbeenemployedasExecutiveVicePresident,ChiefFinancialOfficerbythe

CompanysinceJanuaryof2022.From2018to2020,heservedinvariousroleswithTheVitamin

Shoppe,firstasSeniorVicePresident,ChiefAccountingOfficerfrom2018to2019,andthenas

Executive VicePresident, Chief FinancialOfficer from 2019to 2020.Prior tothat, he servedin various

roles with Toys"R" Us for 28years, including as Senior VicePresident, Corporate Controller from 2010

to 2018.

GordonSmith

hasbeenemployedbytheCompanysince1989.SinceJuly2011,hehasservedas

Executive VicePresident, ChiefRealEstate andStore DevelopmentOfficer.From February2008 until

July 2011,Mr. Smith served asSenior Vice President, RealEstate. From October 1989 to February 2008,

Mr. Smith served as Assistant Vice President, Corporate Real Estate.

Item 4.

Mine Safety Disclosures:

Not applicable.

PARTII

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities:

Market & Dividend Information

TheCompany'sClass A CommonStocktradeson theNew YorkStockExchange ("NYSE") under

the symbol CATO.

As of March 23, 2026,the approximate number of record holders of the Company's Class A Common

Stock was 5,000 and there were 2 record holders of the Company's Class B Common Stock.

Stock Performance Graph

ThefollowinggraphcomparestheyearlychangeintheCompany'scumulativetotalshareholder

return onthe Company'sCommon Stock (whichincludes ClassA Stockand ClassB Stock)for eachof

theCompany'slastfivefiscalyearswith(i)theDowJonesU.S.Retailers,ApparelIndexand(ii)the

Russell 2000 Index.

THE CATOCORPORATION

STOCK PERFOMANCE TABLE

(BASE 100 - IN DOLLARS)

LAST TRADING DAY

OF THE FISCAL YEAR

THE CATO

CORPORATION

DOW JONES U.S.

RETAILERS,APPL

INDEX

RUSSELL 2000

INDEX

1/29/2021

100

1/28/2022

149

111

1/27/2023

121

2/2/2024

135

1/31/2025

173

116

1/30/2026

209

135

The graph assumes an initial investment of $100 on January 29, 2021,the last trading day prior to the

commencement of the Company's 2021 fiscal year, and that all dividends were reinvested.

Issuer Purchases of Equity Securities

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

ended January 31, 2026:

Total Number of

Maximum Number

Shares Purchased as

(or Approximate Dollar

Total Number

Part of Publicly

Value) of Shares that may

of Shares

Average Price

Announced Plans or

yet be Purchased Under

Period

Purchased

Paid per Share (1)

Programs (2)

the Plans or Programs (2)

November 2025

December 2025

January 2026

Total

680,740

(1)

Prices include trading costs.

(2)

As of November 1, 2025, the Company's share repurchase program had 680,740 shares remaining in

openauthorizations.DuringthefourthquarterendedJanuary31,2026,theCompanydidnot

repurchase or retire any sharesunder this program. Asof the fourth quarter endedJanuary 31, 2026,

the Company had680,740 shares remainingin open authorizations.There is nospecified expiration

date for the Company's repurchase program.

Item 7.

Management's Discussion and Analysis of Financial Condition and Resultsof Operations:

Management'sDiscussion andAnalysis ofFinancial Conditionand Resultsof Operationsis intended

to provide information to assist readers in betterunderstanding and evaluating our financial condition and

resultsofoperations.ThefollowinginformationshouldbereadinconjunctionwiththeConsolidated

Financial Statements, including the accompanying Notes appearing inPart II, Item 8 of thisannual report

on Form 10-K.This section of the annual reporton Form 10-K generally discusses fiscal 2025and fiscal

2024andyear-to-yearcomparisonsbetweenfiscal2025andfiscal2024,aswellascertainfiscal2023

items.Discussionsoffiscal2023itemsandyear-to-yearcomparisonsbetweenfiscal2024andfiscal

2023 that are not includedin this Form 10-K canbe found in "Management'sDiscussion and Analysis of

FinancialConditionandResultsofOperations"inPartII,Item7oftheCompany'sannualreporton

Form 10-K for the fiscal year ended February 1, 2025.

Recent Developments

TariffUncertainties and Pressures

Asignificantquantityofourproducts aremadeinChinaandSoutheast Asia.Theseproductswere

subjecttoreciprocaltariffsthroughoutfiscal2025.OnFebruary20,2026,theSupremeCourtstruck

downthesetariffs.Therulingdoesnotestablisharefundprocess,andsignificantuncertaintyremains

regarding howand whenany amountsmay berefunded.Weare evaluatingthe rulingand anypotential

actionsavailabletous.Weareunabletoestimatethefinancialimpact,ifany,atthistimedueto

uncertainties regarding the process, timing and amounts of anyrefunds.

On February 20, 2026,after the Supreme Courtruling, a 10% tariffunder Section 122 wasenacted for

150 days.On March 11,2026, the U.S.Trade Representativeannounced Section 301investigations into

various countries, including countries where much of our products are manufactured.The extent to which

these Section301 investigations willresult inadditional tariffs,and thetiming of anypotential tariffs,is

currently unknown.Although the tariff amounts are reduced from their levels in the second half of 2025,

thecurrenttariffregimeishigherthanatthebeginningof2025,whichwillnegativelyimpactour

acquisition costs in the first half of 2026 and possibly the second halfof 2026.

Results of Operations

The table below sets forth certain financial data of the Companyexpressed as a percentage of

retail sales for the years indicated:

Fiscal Year Ended

January 31, 2026

February 1, 2025

Retail sales …………………………………………………………..

100.0

Other revenue…………………………………………………………

1.1

1.2

Total revenues ……………………………………………………….

101.1

101.2

Cost of goods sold …………………………………………………..

66.7

68.0

Selling, general and administrative………………………………….

35.0

36.1

Depreciation …………………………………………………………

1.5

Interest and other income ……………………………………………

1.0

1.8

Loss before income taxes …………………………………………

(1.2)

(2.5)

Net loss…………………………………………………………..

(0.9)

(2.8)

Fiscal 2025 Compared to Fiscal 2024

Retail salesincreased by0.7% to$646.8 millionin fiscal2025 comparedto $642.1million infiscal

2024. The increase inretail sales in fiscal2025 was primarily dueto a 4.5%increase in same-store sales,

partiallyoffsetbyclosed stores in2024and2025.Same-storesalesforthefiscalyear2025increased

primarily due tohigher transactions volume andslightly higher average salesper transaction. Same-store

salesincludesstoresthathavebeenopenmorethan15months.Storesthathavebeenrelocatedor

expandedarealsoincluded inthesame-store salescalculationaftertheyhavebeenopenmorethan15

months.In fiscal 2025 and fiscal 2024, e-commerce sales were less than 5%of total sales and same-store

sales. Themethod ofcalculating same-store salesvaries across theretail industry.As aresult, our same-

store salescalculation maynot becomparable tosimilarly titledmeasures reportedby othercompanies.

Totalrevenues, comprised ofretail salesand otherrevenue (principally financecharges andlate feeson

customer accounts receivable,gift card breakage, shippingcharges for e-commerce purchasesand layaway

fees), increased by 0.6%to $653.8million in fiscal2025 compared to$649.8 million infiscal 2024. The

Companyoperated1,069storesatJanuary31,2026comparedto1,117storesoperatedatFebruary1,

2025.

In fiscal 2025, the Company opened no new stores and closed 48 stores.

Otherrevenue,acomponentoftotalrevenues,was$7.0millioninfiscal2025comparedto$7.7

million in fiscal 2024.

Credit revenueof $2.7million represented 0.4%of totalrevenue infiscal 2025,relativelyflat both in

dollars and percentage comparedtofiscal2024.Creditrevenueiscomprisedofinterestearnedonthe

Company'sprivatelabelcreditcardportfolioandrelatedfeeincome.Relatedexpensesinclude

principallypayroll,postageandotheradministrativeexpensesandtotaled$1.7millioninfiscal2025

compared to$1.6 millionin fiscal2024.Totalcredit segmentincome beforetaxeswas $2.2million in

fiscal 2025, relatively flat in dollars compared to fiscal 2024.

Costofgoods soldwas $431.6million, or66.7% ofretailsales, infiscal2025 comparedto$436.4

million, or 68.0% of retail sales, in fiscal 2024. The decrease in cost of goods sold as a percentage of sales

resulted primarily from lower buying, distribution and occupancy costs, partially offset by increased sales of

markdownpriced goods.Cost of goodssold includes merchandisecosts, net ofdiscounts and allowances,

buying costs,distribution costs,occupancy costs,and freightand inventoryshrinkage. Netmerchandise

costsandin-boundfreightarecapitalizedasinventorycosts.Buyinganddistributioncostsinclude

payroll, payroll-relatedcosts andoperating expensesfor thebuying departmentsand distributioncenter.

Occupancyexpensesincluderent,realestatetaxes,insurance,commonareamaintenance,utilitiesand

maintenance for stores and distribution facilities. Total gross margin dollars (retail sales less cost of goods

sold and excludingdepreciation) increased by4.7% to $215.3million in fiscal2025 from $205.7million

in fiscal 2024. Gross margin as presented may not be comparable to that of other companies.

Selling, generaland administrative expenses("SG&A"), whichprimarily include corporateand store

payroll,relatedpayrolltaxesandbenefits,insurance,supplies,advertising,bankandcreditcard

processing fees were$226.4 million infiscal 2025 comparedto $231.5 millionin fiscal 2024,a decrease

of2.2%.Asapercentofretailsales,SG&Awas35.0%comparedto36.1%intheprioryear.The

decreaseinSG&Aexpenseinfiscal2025wasprimarilyattributabletolowerpayrollcostsandlower

closed store and impairment expenses.

Depreciationexpensewas$10.0millioninfiscal2025comparedto$9.8millioninfiscal2024.

Depreciationexpenseincreasedslightlyfromfiscal2024duetoadditionaldistributioncenterand

informationtechnologydepreciation,partiallyoffsetbyadecreaseinleaseholdimprovementsand

fixtures depreciation.

Interest and other income decreasedto $6.7 million infiscal 2025 compared to$11.8 million infiscal

2024. Thedecrease isprimarily attributabletogains onthesale oflandheld forinvestment andon the

disposal of the Company's corporate aircraft in 2024.

Income taxbenefit was$1.6 million,or0.2% ofretail salesinfiscal 2025compared toincome tax

expense of$1.9 million, or0.3% ofretail sales infiscal 2024.The effectiveincome taxrate was21.2%

(Benefit) in fiscal 2025 compared to(12.1%)(Expense) in fiscal 2024.The income tax expense decrease

was primarily due to a reduction in foreign income taxes and a larger release of reserves related to expired

statute oflimitations foruncertain taxpositions infiscal 2025.On July4, 2025,the OneBig Beautiful

Bill Act (the "OBBBA") was signed into law.The Company considered the impact of the OBBBA in the

second quarter of fiscal 2025.The changes do not have a material impact on the Company'seffective tax

rate.TheCompanycontinuestomonitorimpactsmovingforward.SeeNote12totheConsolidated

Financial Statements, "Income Taxes," for further details.

Off-Balance Sheet Arrangements

Not applicable.

Critical Accounting Policies and Estimates

The Company'saccounting policies aremore fully describedin Note1 to theConsolidated Financial

Statements.AsdisclosedinNote1totheConsolidatedFinancialStatements,thepreparationofthe

Company'sfinancialstatementsinconformitywithgenerallyacceptedaccountingprinciplesinthe

UnitedStates("GAAP")requiresmanagementtomakeestimatesandassumptionsaboutfutureevents

thataffecttheamounts reportedinthefinancial statementsandaccompanying notes.Future eventsand

theireffectscannotbedeterminedwithabsolutecertainty.Therefore,thedeterminationofestimates

requirestheexerciseofjudgment.Actualresultsinevitablywilldifferfromthoseestimates,andsuch

differencesmaybematerialtothefinancialstatements.Themostsignificantaccountingestimates

inherent in the preparation of the Company's financial statements include the calculation of potential asset

impairment, income taxvaluation allowances, reserves relatingto self-insured healthinsurance, workers'

compensation, generaland autoinsurance liabilities,uncertain taxpositions, theallowance forcustomer

credit losses, and inventory shrinkage.

The Company's critical accounting policies and estimates are discussed with the Audit Committee.

Allowance for Customer Credit Losses

The Company evaluatesthe collectabilityof customeraccounts receivableand recordsan allowance

for customercredit lossesbased onthe accountsreceivable aging andestimates ofactual write-offs.The

allowance isreviewed foradequacy andadjusted, asnecessary,on aquarterly basis.The Companyalso

providesforestimateduncollectiblelatefeeschargedbasedonhistoricalwrite-offs.TheCompany's

financial resultscan beimpacted bychanges incustomer losswrite-off experienceand theaging ofthe

accounts receivable portfolio.

Merchandise Inventories

The Company'sinventory isvalued usingthe weighted-averagecost methodand isstated atthe net

realizable value. Physical inventoriesare conducted throughout theyear to calculate actualshrinkage and

inventory on hand. Actual shrinkage results are used to estimate inventory shrinkage, which is accrued for

theperiod betweenthelast physicalinventory andthefinancial reportingdate. TheCompany regularly

reviewsitsinventorylevelstoidentifyslowmovingmerchandiseandusesmarkdownstoclearslow

moving inventory.

Lease Accounting

The Company determines whether an arrangement is a lease at inception. The Company has operating

leases forstores,offices,warehouse spaceand equipment.Its leaseshave remaininglease termsofone

year to 10 years, some of whichinclude options to extend the lease term forup to five years, and some of

whichincludeoptionstoterminatetheleasewithinoneyear.TheCompany considerstheseoptionsin

determiningthelease termusedtoestablish itsright-of-use assetsand leaseliabilities. TheCompany's

lease agreements do not contain any material residual value guarantees or materialrestrictive covenants.

AsmostoftheCompany'sleasesdonotprovideanimplicitrate,theCompanyusesitsestimated

incrementalborrowingratebasedontheinformationavailableatcommencementdateoftheleasein

determining the presentvalue of leasepayments.See Note 11to theConsolidated Financial Statements,

"Leases," for further information.

Impairment of Long-Lived Assets

TheCompany investsinleaseholds,right-of useassetsandequipment primarilyinconnectionwith

the opening and remodeling of storesand in computer software and hardware. TheCompany periodically

reviews its storelocations and estimatesthe recoverability ofits long-lived assets,which primarily relate

toFixturesandequipment,Leaseholdimprovements,Right-of-useassetsnetofLeaseliabilitiesand

Informationtechnologyequipmentandsoftware.Animpairmentchargeisrecordedfortheamountby

which thecarrying valueexceeds theestimated fairvalue whenthe Companydetermines thatprojected

cash flows associated with those long-lived assets will not be sufficient to recover the carrying value.This

determination is based on anumber of factors, including the store'shistorical operating results and future

projected cash flows, which include contribution margin projections.The Company assesses the fair value

of each leaseby considering marketrents andany lease termsthat may adjustmarket rents undercertain

conditions, such as the loss ofan anchor tenant or a leasedspace in a shopping center notmeeting certain

criteria. Further,in determining whento close astore, the Company considersreal estate developmentin

thearea andperceived localmarket conditions,which canbe difficulttopredict andmay besubjectto

change.

Insurance Liabilities

TheCompanyisprimarilyself-insuredforhealthcare,workers'compensationandgeneralliability

costs. These costs aresignificant primarily due to thelarge number of theCompany's retail locationsand

associates. The Company'sself-insurance liabilities arebased on thetotal estimated costsof claims filed

andestimatesofclaimsincurredbutnotreported,lessamountspaidagainstsuchclaims,andarenot

discounted.Managementreviewscurrentandhistoricalclaimsdataindevelopingitsestimates.The

Companyalsousesinformationprovidedbyoutsideactuarieswithrespecttohealthcare,workers'

compensation and general liability claims.If the underlying facts andcircumstances of the claims change

orthehistoricalexperienceuponwhichinsuranceprovisionsarerecordedisnotindicativeoffuture

trends, thenthe Companymay berequired tomake adjustmentsto theprovision forinsurance coststhat

couldbematerialtotheCompany'sreportedfinancial conditionandresultsofoperations.Historically,

actual results have not significantly deviated from estimates.

Uncertain Tax Positions

The Company recordsliabilities foruncertain taxpositions primarilyrelated tostate incometaxes as

of the balance sheetdate.These liabilities reflect theCompany's bestestimate of its ultimateincome tax

liabilitybasedonthetaxcodes,regulations,andpronouncementsofthejurisdictionsinwhichwedo

business.Estimating our ultimate tax liability involves significant judgments regarding theapplication of

complex taxregulations acrossmany jurisdictions.Despite theCompany'sbelief thatthe estimatesand

judgmentsarereasonable,differencesbetweentheestimatedandactualtaxliabilitiescananddoexist

from time to time.These differences may arise from settlementsof tax audits, expiration of the statute of

limitations, and the evolution and application of thevarious jurisdictional tax codes and regulations.Any

differences willbe recordedin theperiod inwhich they becomeknown andcould havea materialeffect

on the results of operations in the period the adjustment is recorded.

Deferred Tax ValuationAllowance

TheCompanyassessesthelikelihoodthatdeferredtaxassetswillberealizedinlightofthe

Company'scurrentfinancialperformanceandprojectedfuturefinancialperformance.Basedonthis

assessment, theCompany thendetermines ifa valuationallowance shouldbe recorded.If theCompany

concludesthatitismorelikelythannotthattheCompanywillnotbeabletorealizeitstaxdeferred

assets, a valuation allowance is recorded for the proportion of the deferred tax asset it determines may not

be realized.This evaluationrequires significantjudgment andinvolves theconsideration ofall available

positiveandnegativeevidence,includingourhistoricaloperatingresults,theexistenceofcumulative

lossesinrecentyears,ongoingprudentandfeasibletaxplanningstrategies,andprojectionsoffuture

taxable income.

Liquidity, Capital Resources and Market Risk

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

flowsfromoperationsanditsasset-backedrevolvinglineofcredit,willbeadequatetofundthe

Company'sregularoperatingrequirements,including$64.0millionofleaseobligationsandplanned

investments of$7.4 million ofcapital expenditures,for thenext twelvemonths from theissuance ofthis

annual report on Form 10-K.

Cashusedinoperatingactivitiesduringfiscal2025was$1.5millionascomparedto$19.7 million

used in fiscal 2024 and $0.5 million provided in fiscal 2023. Cash used in operating activities during 2025

was primarily attributable tonet loss adjusted fordepreciation,stock-based compensation and changesin

workingcapital.Thedecreaseof$18.2millionincashusedforfiscal2025compared tofiscal2024is

primarily due to a lower net loss and a decreasein merchandise inventory, partially offset by a decrease in

accounts payable.

At January31,2026, theCompany hadworkingcapitalof$37.4 million comparedto$34.9 million

and $55.1 million atFebruary 1, 2025 andFebruary 3, 2024, respectively.The increasein workingcapital

in fiscal2025 comparedto theprior yearis primarilydue tolower accountspayable, accruedliabilities and

current lease liability, partially offset bylower cash and cash equivalents and merchandiseinventory.

TheABLCreditAgreement("ABLFacility")ofupto$35.0millioniscommittedthroughMarch

2028 and is secured primarily by inventoryand third-party credit card receivables. The proceedsfrom the

ABLFacilitymaybeusedtoprovidefundingforongoingworkingcapitalandgeneralcorporate

purposes. There wereno borrowings outstanding andthe availability under thefacility was $30.0million

beforegiving effecttoa$3.0millionoutstanding letterofcreditthatreducedborrowing availabilityto

$27.0millionasofJanuary31,2026.Theweightedaverageinterestrateunderthecreditfacilitywas

zero at January 31, 2026 due to no outstanding borrowings.

Expenditures for property and equipment totaled $3.8 million, $7.9 millionand $12.5 million in fiscal

2025,2024and2023,respectively.Thedecreaseinexpendituresforfiscal2025wasprimarilydue to

finishing projects related to investments inthe distribution center and information technology.

Netcashusedininvestingactivitiestotaled$1.3millionforfiscal2025compared to$29.0million

provided infiscal2024 and$19.8million providedinfiscal2023.In fiscal2025, thedecrease incash

providedwasprimarilyattributabletolowersalesofotherassetsandshort-term investments,partially

offset by a decrease in expenditures for property and equipment and purchases of short-terminvestments.

Net cashused in financingactivities totaled$0.9 million infiscal 2025compared to netcash used of

$14.1millionforfiscal2024and$16.1millionforfiscal2023.The decrease incash used duringfiscal

2025 was primarily due to theelimination of dividend payments and adecrease in share repurchases.

The Company does not use derivative financial instruments.

SeeNote4totheConsolidatedFinancialStatements,"FairValueMeasurements,"forinformation

regarding the Company's financial assets that are measured at fair value.

TheCompany'sinvestmentportfoliowasprimarilyinvestedincorporatebondsandtaxable

governmental debtsecurities held inmanaged accounts withunderlying ratings ofA orbetter atJanuary

31,2026. Thecorporate bondshave contractualmaturities whichrangefrom 14daysto2.6years.The

U.S. Treasury notes have a contractual maturity of 15 days.

Level2investmentsecuritiesatJanuary31,2026primarilyincludecorporatebondsforwhichquoted

pricesmaynotbeavailableonactiveexchangesforidenticalinstruments.Theirfairvalueisprincipally

based on market values determined by management with the assistance of a third-party pricing service.Since

quotedpricesinactivemarketsforidenticalassetsarenotavailable,thesepricesaredeterminedbythe

pricing serviceusing observablemarket informationsuch asquotes fromless activemarkets and/orquoted

prices of securities with similar characteristics,among other factors.

Deferredcompensation planassetsconsistprimarily oflifeinsurancepolicies. Theselifeinsurance

policies are valued based on the cash surrender value of the insurance contract, which is determined based

onsuchfactorsasthefairvalueoftheunderlyingassetsanddiscountedcashflowandaretherefore

classifiedwithinLevel3ofthevaluationhierarchy.TheLevel3liabilityassociatedwiththelife

insurancepoliciesrepresentsadeferredcompensationobligation,thevalueofwhichistrackedvia

underlyinginsurancefunds'netassetvalues,asrecordedinOthernoncurrentliabilitiesinthe

Consolidated Balance Sheets. Thesefunds are designedto mirror thereturn of existingmutual funds and

money market funds that are observable and actively traded.

Contractual Obligations

ContractualobligationsforfuturepaymentsatJanuary31,2026relateprimarilytooperatinglease

commitments forstore leases.Operating leasesrepresent minimumrequired leasepayments undernon-

cancellableleaseterms.Moststoreleasesalsorequirepaymentofrelatedoperatingexpensessuchas

taxes, utilities, insurance and maintenance, which are not included in our estimated lease obligations.See

Note11totheConsolidatedFinancialStatements,"Leases",forthematuritiesofouroperatinglease

obligations.

Recent Accounting Pronouncements

See Note 1 tothe Consolidated Financial Statements,"Summary of Significant Accounting Policies-

Recently Adopted Accounting Policies" and "-Recently Issued AccountingPronouncements."

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk:

TheCompanyissubjecttomarketrateriskfromexposuretochangesininterestratesbasedonits

financing, investing andcash management activities,but the Companydoes notbelieve suchexposure is

material.

Item 8.

Financial Statements and Supplementary Data:

INDEX TO FINANCIAL STATEMENTS AND SCHEDULE

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID

238

) .....................................

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)for the fiscal

years ended January 31, 2026, February 1, 2025 and February 3, 2024 ...........................................

Consolidated Balance Sheets at January 31, 2026 and February 1, 2025.............................................

Consolidated Statements of Cash Flows for the fiscal years ended January 31, 2026,February 1, 2025

and February 3, 2024 ........................................................................................................................

Consolidated Statements of Stockholders' Equity for the fiscal years ended January 31,2026,

February 1, 2025 and February 3, 2024 ............................................................................................

Notes to Consolidated Financial Statements ..........................................................................................

Schedule II - Valuationand Qualifying Accounts for the fiscal years ended January 31, 2026,

February 1, 2025 and February 3, 2024 ............................................................................................

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of The Cato Corporation

Opinions on the Financial Statements and Internal Control over FinancialReporting

We have audited the accompanying consolidated balance sheets of The Cato Corporation and its

subsidiaries (the "Company") as of January 31, 2026 and February 1, 2025,and the related consolidated

statements of income (loss) and comprehensive income (loss), of stockholders'equity and of cash flows

for each of the three years in the period ended January 31, 2026, includingthe related notes and financial

statement schedule listed in the accompanying index (collectively referredto as the "consolidated

financial statements"). We also have audited the Company's internal control over financial reporting as of

January 31, 2026, based on criteria established in Internal Control - IntegratedFramework (2013) issued

by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to abovepresent fairly, in all material

respects, the financial position of the Company as of January 31, 2026and February 1, 2025, and the

results of its operations and its cash flows for each of the three yearsin the period ended January 31, 2026

in conformity with accounting principles generally accepted in the UnitedStates of America. Also in our

opinion, the Company maintained, in all material respects, effective internal controlover financial

reporting as of January 31, 2026, based on criteria established in InternalControl - Integrated Framework

(2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financialstatements, for maintaining

effective internal control over financial reporting, and for its assessment of the effectiveness of internal

control over financial reporting, included in Management's Report on Internal Control Over Financial

Reporting appearing under Item 9A. Our responsibility is to express opinionson the Company's

consolidated financial statements and on the Company's internal control overfinancial reporting based on

our audits. We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (PCAOB) and are required to be independent withrespect to the Company in

accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities

and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that

we plan and perform the audits to obtain reasonable assurance aboutwhether the consolidated financial

statements are free of material misstatement, whether due to error or fraud,and whether effective internal

control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performingprocedures to assess the risks of

material misstatement of the consolidated financial statements, whether dueto error or fraud, and

performing procedures that respond to those risks. Such proceduresincluded examining, on a test basis,

evidence regarding the amounts and disclosures in the consolidated financialstatements. Our audits also

included evaluating the accounting principles used and significantestimates made by management, as

well as evaluating the overall presentation of the consolidatedfinancial statements. Our audit of internal

control over financial reporting included obtaining an understanding ofinternal control over financial

reporting, assessing the risk that a material weakness exists, and testingand evaluating the design and

operating effectiveness of internal control based on the assessed risk. Our audits alsoincluded performing

such other procedures as we considered necessary in the circumstances. We believe that our audits

provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable

assurance regarding the reliability of financial reportingand the preparation of financial statements for

external purposes in accordance with generally accepted accountingprinciples. A company's internal

control over financial reporting includes those policies and proceduresthat (i) pertain to the maintenance

of records that, in reasonable detail, accurately and fairly reflect the transactionsand dispositions of the

assets of the company; (ii) provide reasonable assurance that transactionsare recorded as necessary to

permit preparation of financial statements in accordance with generallyaccepted accounting principles,

and that receipts and expenditures of the company are being madeonly in accordance with authorizations

of management and directors of the company; and (iii) providereasonable assurance regarding prevention

or timely detection of unauthorized acquisition, use, or dispositionof the company's assets that could

have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reportingmay not prevent or detect

misstatements. Also, projections of any evaluation of effectiveness to future periodsare subject to the risk

that controls may become inadequate because of changes in conditions, orthat the degree of compliance

with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arisingfrom the current period audit of the

consolidated financial statements that was communicated or required tobe communicated to the audit

committee and that (i) relates to accounts or disclosures that are materialto the consolidated financial

statements and (ii) involved our especially challenging, subjective, orcomplex judgments. The

communication of critical audit matters does not alter in any way our opinion onthe consolidated

financial statements, taken as a whole, and we are not, by communicatingthe critical audit matter below,

providing a separate opinion on the critical audit matter or on the accountsor disclosures to which it

relates.

Impairment of Long-Lived Assets - Store Location Asset Groupings

As described in Notes 1 and 6 to the consolidated financial statements,the Company's consolidated

property and equipment, net balance was $53.7 million, of which the storelocations were a portion, and

consolidated operating lease right-of-use assets, net balance was $153.9 millionas of January 31, 2026.

The Company invests in leaseholds, right-of-use assets and equipment,primarily in connection with the

opening and remodeling of stores, and in computer software and hardware.The Company periodically

reviews its store locations and estimates the recoverabilityof its long-lived assets, which primarily relate

to fixtures and equipment, leasehold improvements, right-of-use assets netof lease liabilities, and

information technology equipment and software. An impairment charge is recordedfor the amount by

which the carrying value exceeds the estimated fair value when managementdetermines that projected

cash flows associated with those long-lived assets will not be sufficient to recoverthe carrying value. This

determination is based on a number of factors, including the store's historical operating results and future

projected cash flows, which include contribution margin projections. The Companyassesses the fair value

of each lease by considering market rents and any lease terms that mayadjust market rents under certain

conditions such as the loss of an anchor tenant or a leased space in a shoppingcenter not meeting certain

criteria. An impairment charge for store assets of $0.2 million was recorded duringthe year ended

January 31, 2026.

The principal considerations for our determination that performingprocedures relating to impairment of

long-lived assets - store location asset groupings is a critical audit matterare (i) the significant judgment

by management when determining the fair value measurement of thestore location asset groupings,

which led to (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and

evaluating management's projected cash flow assumptions related to contribution margin projections.

Addressing the matter involved performing procedures and evaluatingaudit evidence in connection with

forming our overall opinion on the consolidated financial statements.These procedures included testing

the effectiveness of controls relating to management's long-lived assets - store location recoverability test

and determination of the fair value of the asset groupings.These procedures also included, among others,

(i) testing the completeness and accuracy of underlying data used inthe projected cash flows and store

location asset groupings, (ii) evaluating the reasonableness of management's assumptions related to

contribution margin projections by considering current and historical performanceof the store location

asset groupings and whether the assumptions were consistent with evidenceobtained in other areas of the

audit, (iii) evaluating the appropriateness of the projected cash flow model,and (iv) evaluating

management's assessment of the fair value of the leased assets included in the store location asset

groupings.

/s/

PricewaterhouseCoopers LLP

Charlotte, North Carolina

March 25, 2026

We have served as the Company'sauditor since 2003.

THE CATO CORPORATION

CONSOLIDATED STATEMENTSOF INCOME (LOSS) AND

COMPREHENSIVE INCOME (LOSS)

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

(Dollars in thousands, except per share data)

REVENUES

Retail sales

646,830

642,140

700,318

Other revenue (principally finance charges,

late fees and layaway charges)

6,982

7,666

7,741

Total revenues

653,812

649,806

708,059

COSTS AND EXPENSES, NET

Cost of goods sold (exclusive of

depreciation shown below)

431,551

436,440

464,313

Selling, general and administrative (exclusive

of depreciation shown below)

226,347

231,430

252,742

Depreciation

9,986

9,817

9,871

Interest expense

115

Interest and other income

(6,687)

(11,827)

(5,101)

Costs and expenses, net

661,312

665,919

721,860

Loss before income taxes

(7,500)

(16,113)

(13,801)

Income tax (benefit) expense

(1,591)

1,944

10,140

Net loss

(5,909)

(18,057)

(23,941)

Basic earnings (loss) per share

(0.31)

(0.97)

(1.17)

Diluted earnings (loss) per share

(0.31)

(0.97)

(1.17)

Dividends per share

0.51

0.68

Comprehensive income (loss):

Net loss

(5,909)

(18,057)

(23,941)

Net unrealized gain (loss) on available-for-sale

securities for fiscal years 2025, 2024,

and 2023, respectively

121

(242)

1,633

Comprehensive loss

(5,788)

(18,299)

(22,308)

See notes to consolidated financial statements.

THE CATO CORPORATION

CONSOLIDATED BALANCE SHEETS

January 31, 2026

February 1, 2025

(Dollars in thousands, except share and per share data)

ASSETS

Current Assets:

Cash and cash equivalents

16,788

20,279

Short-term investments

56,859

57,423

Restricted cash

2,675

2,799

Accounts receivable, net of allowance for customer credit losses of $

682

January 31, 2026 and $

581

at February 1, 2025

25,462

24,540

Merchandise inventories

83,696

110,739

Prepaid expenses and other current assets

7,787

7,406

Total Current Assets

193,267

223,186

Property and equipment - net

53,748

60,326

Other assets

20,471

19,979

Right-of-Use assets - net

153,933

148,870

Total Assets

421,419

452,361

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

64,958

88,641

Accrued expenses

37,101

41,717

Accrued bonus and benefits

326

Current lease liability

53,507

57,555

Total Current Liabilities

155,892

188,239

Other noncurrent liabilities

11,272

13,485

Lease liability

96,941

88,341

Commitments and contingencies

Stockholders' Equity:

Preferred stock, $

100

par value per share,

100,000

shares authorized,

none

issued

Class A common stock, $

0.033

par value per share,

50,000,000

shares authorized;

17,976,854

and

18,313,929

shares issued at

January 31, 2026 and February 1, 2025, respectively

608

619

Convertible Class B common stock, $

0.033

par value per share,

15,000,000

shares authorized;

1,763,652

shares issued at

January 31, 2026 and February 1, 2025

Additional paid-in capital

131,347

129,530

Retained earnings

25,026

31,935

Accumulated other comprehensive income

274

153

Total Stockholders' Equity

157,314

162,296

Total Liabilities and Stockholders' Equity

421,419

452,361

See notes to consolidated financial statements.

THE CATO CORPORATION

CONSOLIDATED STATEMENTSOF CASH FLOWS

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

(Dollars in thousands)

Operating Activities:

Net loss

(5,909)

(18,057)

(23,941)

Adjustments to reconcile net loss to net cash (used in) provided

by operating activities:

Depreciation

9,986

9,817

9,871

Provision for customer credit losses

856

654

554

Purchase premium and premium amortization of investments

(908)

(1,131)

(711)

(Gain) Loss on sale of assets held for investment

(37)

(5,343)

Share based compensation

1,672

2,283

4,170

Deferred income taxes

8,724

(Gain) loss on disposal of property and equipment

(668)

192

Impairment of assets

202

786

1,811

Changes in operating assets and liabilities which provided

(used) cash:

Accounts receivable

(1,412)

1,357

(608)

Merchandise inventories

27,043

(12,136)

13,453

Prepaid and other assets

(1,237)

(212)

(216)

Operating lease right-of-use assets and liabilities

(511)

(1,410)

(2,056)

Accrued income taxes

(613)

Accounts payable, accrued expenses and other liabilities

(30,538)

3,455

(10,053)

Net cash (used in) provided by operating activities

(1,461)

(19,745)

477

Investing Activities:

Expenditures for property and equipment

(3,763)

(7,872)

(12,532)

Purchase of short-term investments

(25,446)

(39,612)

(48,055)

Sales of short-term investments

27,039

62,782

80,371

Sales of other assets

867

13,667

(8)

Net cash (used in) provided by investing activities

(1,303)

28,965

19,776

Financing Activities:

Dividends paid

(10,516)

(13,954)

Repurchase of common stock

(995)

(3,877)

(2,562)

Proceeds from employee stock purchase plan

144

338

384

Net cash used in financing activities

(851)

(14,055)

(16,132)

Net (decrease) increase in cash, cash equivalents, and restricted cash

(3,615)

(4,835)

4,121

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

23,078

27,913

23,792

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

19,463

23,078

27,913

Non-cash activity:

Accrued property and equipment expenditures

337

329

942

Accrued treasury stock

Life insurance receivable

372

See notes to consolidated financial statements.

THE CATO CORPORATION

CONSOLIDATED STATEMENTSOF STOCKHOLDERS' EQUITY

Accumulated

Additional

Other

Total

Common

Paid-In

Retained

Comprehensive

Stockholders'

Stock

Capital

Earnings

Income

Equity

(Dollars in thousands, except per share data)

Balance - January 28, 2023

691

122,431

104,709

(1,238)

226,593

Comprehensive income:

Net loss

(23,941)

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

deferred income tax expense of $

489

1,633

Dividends paid ($

0.68

per share)

(13,954)

Class A common stock sold through employee stock purchaseplan

445

447

Share-based compensation expense

4,077

4,105

Repurchase and retirement of treasury shares

(9)

(2,553)

(2,562)

Balance - February 3, 2024

694

126,953

64,279

395

192,321

Comprehensive income:

Net loss

(18,057)

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

deferred income tax of $

(242)

Dividends paid ($

0.51

per share)

(10,516)

Class A common stock sold through employee stock purchaseplan

395

397

Share-based compensation expense

2,182

2,270

Repurchase and retirement of treasury shares

(30)

(3,847)

(3,877)

Balance - February 1, 2025

678

129,530

31,935

153

162,296

Comprehensive income:

Net loss

(5,909)

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

deferred income tax of $

121

Class A common stock sold through employee stock purchaseplan

168

170

Share-based compensation expense

(2)

1,649

1,647

Repurchase and retirement of treasury shares

(11)

(984)

(995)

Other

(16)

Balance - January 31, 2026

667

131,347

25,026

274

157,314

See notes to consolidated financial statements.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.Summary of Significant Accounting Policies:

Principles of Consolidation:

The Consolidated Financial Statements include the accounts of The Cato

Corporation anditswholly-owned subsidiaries(the "Company").Allsignificant intercompanyaccounts

and transactions have been eliminated.

DescriptionofBusinessandFiscal

Year:

TheCompanyhas

two

reportablesegments-the

operationofafashionspecialtystoressegment("RetailSegment")andacreditcardsegment("Credit

Segment"). Thefashion specialtystores operateunder thenames "Cato,""Cato Fashions,""Cato Plus,"

"It's Fashion," "It'sFashion Metro," "Versona"and "Cache," including e-commerce websites. The stores

arelocatedprimarilyinstripshoppingcentersprincipallyinthesoutheasternUnitedStates.The

Company's fiscalyear endson theSaturday nearest January31 ofthe subsequentyear.Fiscal year2025

and 2024 are

-week years and 2023 is a

-week year.

UseofEstimates:

ThepreparationoftheCompany'sfinancialstatementsinconformitywith

accountingprinciplesgenerally acceptedintheUnitedStates("GAAP")requiresmanagement tomake

estimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureof

contingentassetsandliabilitiesatthedateofthefinancialstatementsandthereportedamountsof

revenuesandexpensesduringthereportingperiod.Actualresultscoulddifferfromthoseestimates.

Significant accountingestimates reflectedin theCompany'sfinancial statementsinclude thecalculation

ofpotentialassetimpairment,incometaxvaluationallowances,reservesrelatingtoself-insuredhealth

insurance,workers'compensation,generalandautoinsuranceliabilities,uncertaintaxpositions,the

allowance for customer credit losses, and inventory shrinkage.

CashandCashEquivalents:

Cashandcashequivalentsconsistofhighlyliquidinvestmentswith

original maturities of three months or less.

Short-TermInvestments:

Investments withoriginal maturitiesbeyond threemonths areclassified

as short-terminvestments. SeeNote 3for theCompany'sestimated fairvalue of,and otherinformation

regarding,itsshort-terminvestments.

TheCompany'sshort-terminvestmentsareallclassifiedas

available-for-sale.Astheyareavailableforcurrentoperations,theyareclassifiedontheConsolidated

Balance SheetsasCurrent Assets.Available-for-salesecurities arecarried atfair value,withunrealized

gainsandtemporarylosses,netofincometaxes,reportedasacomponentofAccumulatedother

comprehensive income.Other thantemporary declinesin thefair valueof investmentsare recordedas a

reductioninthecostoftheinvestmentsintheaccompanyingConsolidatedBalanceSheetsanda

reductionofInterest andotherincome intheaccompanying ConsolidatedStatements ofIncome (Loss)

and ComprehensiveIncome (Loss).The costof debtsecurities isadjusted foramortization ofpremiums

and accretion of discounts to maturity.The amortization of premiums, accretion of discountsand realized

gains and losses are included in Interest and other income.

Restricted Cash:

The Company had $

2.7

million and $

2.8

million in escrow at January 31, 2026 and

February 1, 2025, respectively, as security and collateral for administration of the Company'sself-insured

workers'compensationandgeneralliabilitycoverage,whichisreportedasRestrictedcashonthe

Consolidated Balance Sheets.

Supplemental Cash FlowInformation:

Income taxpayments, netof refundsreceived, forthe fiscal

years ended January 31, 2026, February 1, 2025, and February3, 2024 are detailed in the table below:

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fiscal YearEnded

January 31, 2026

February 1, 2025

February 3, 2024

(Dollars in thousands)

Federal taxes

(314)

(860)

(1)

State taxes

Kentucky

North Carolina

(174)

174

462

South Carolina

116

366

207

Tennessee

160

209

Texas

268

260

261

Other

230

Foreign taxes

Hong Kong

709

1,529

2,816

Other

Totalincome taxes paid

918

1,874

4,120

Inventories:

Merchandiseinventoriesarestatedatthenetrealizablevalueasdeterminedbythe

weighted-average cost method.

Property and Equipment:

Property and equipment arerecorded at cost, includingland. Maintenance

and repairs are expensed to operations as incurred; renewals and betterments are capitalized. Depreciation

isdetermined onthestraight-line methodover theestimated usefullives oftherelated assetsexcluding

leasehold improvements.Leasehold improvements are amortized over theshorter of the estimated useful

life or lease term.For leases with renewal periods atthe Company'soption, the Company generally uses

theoriginalleasetermplusreasonablyassuredrenewaloptionperiods(generallyonefive-yearoption

period) to determine estimated useful lives.Typical estimated useful lives are as follows:

Estimated

Classification

Useful Lives

Land improvements

years

Buildings

years

Leasehold improvements

years

Fixtures and equipment

years

Information technology equipment and software

years

ImpairmentofLong-LivedAssets:

TheCompanyinvestsinleaseholds,right-of-useassetsand

equipment primarilyin connectionwith theopening andremodeling ofstores andin computersoftware

and hardware. The Company periodically reviews its store locations and estimates the recoverability of its

long-lived assets,which primarilyrelate toFixtures andequipment, Leaseholdimprovements, Right-of-

useassetsnetofLeaseliabilitiesandInformationtechnologyequipmentandsoftware.Animpairment

charge isrecorded for theamount by whichthe carrying valueexceeds the estimatedfair value whenthe

Company determinesthat undiscountedprojected cashflows associatedwith those long-livedassets will

notbesufficienttorecoverthecarryingvalue.Thisdeterminationisbasedonanumberoffactors,

includingeachstore'shistoricaloperatingresultsandfutureprojectedcashflows,whichinclude

contribution margin projections. The Company assesses the fair value of each lease by considering market

rentsandanyleasetermsthatmay adjustmarketrentsundercertainconditions, suchasthelossofan

anchor tenantor aleased spacein ashopping center notmeeting certaincriteria. Further,in determining

whentocloseastore,theCompanyconsidersrealestatedevelopmentintheareaandperceivedlocal

marketconditions,whichcanbedifficulttopredictandmaybesubjecttochange.Assetimpairment

charges of$

202,000

, $

786,000

and $

1,811,000

were incurred infiscal 2025, fiscal2024 and fiscal2023,

respectively.

Other Assets:

Other assets are comprisedof long-term assets,primarily insurance contracts related to

deferred compensation assets and land held for investment purposes.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

Balance as of

January 31, 2026

February 1, 2025

(Dollars in thousands)

Other Assets

Deferred Compensation Investments

9,693

9,301

Land Held for Investment

8,679

Miscellaneous Investments

1,139

Other Deposits

696

596

Other

264

TotalOther Assets

20,471

19,979

Leases:

TheCompanyleasesallofitsretailstores.Mostleaseagreementscontainconstruction

allowances and rent escalations.For purposes of recognizing incentives and minimum rental expenses on

a straight-line basis over the terms of the leases, including renewal periods considered reasonablyassured,

the Company begins amortization as of theinitial possession date, which is when theCompany enters the

space and begins to make improvements in preparation for intended use.

RevenueRecognition:

TheCompanyrecognizessalesatthepointofpurchasewhenthecustomer

takes possessionof themerchandise and paysfor thepurchase, generally withcash orcredit. Salesfrom

purchasesmadewithCatocredit,giftcardsandlayawaysalesfromstoresarealsorecordedwhenthe

customertakespossessionofthemerchandise.E-commerce salesarerecordedwhentheriskoflossis

transferredtothecustomer.Giftcardsarerecordedasdeferredrevenueuntiltheyareredeemedor

forfeited. Giftcards donot haveexpiration dates.Layaway salesare recordedas deferredrevenue until

the customer takes possession or forfeits the merchandise. A provision is made for estimated merchandise

returns basedon salesvolumes andthe Company'sexperience; actualreturns havenot variedmaterially

from historical amounts. A provision is made for estimated write-offs associated withsales made with the

Company's proprietary credit card.In addition, a provision is made for estimated rewards cards issued to

customers basedon theirpurchases with theCompany's proprietycredit card.The rewardscards issued

by the Company have a

-day expiration.Amounts related to shipping and handling billed tocustomers

inasalestransactionareclassifiedasOtherrevenueandthecostsrelatedtoshippingproductto

customers (billed and accrued) are classified as Cost of goods sold.

In accordance with ASU 2014-09,

Revenue from Contracts with Customers (Topic606)

("Topic 606"),

infiscal2025,2024and2023,theCompanyrecognized$

1,034,000

1,448,000

and$

1,116,000

respectively,ofincomeonunredeemedgiftcards("giftcardbreakage")asacomponentofOther

RevenueontheConsolidatedStatementsofIncome (Loss)andComprehensive Income(Loss).Under

Topic606, theCompany recognizesgift cardbreakage usingan expectedbreakage percentagebased on

historical redeemed gift cards. See Note 2 for further information on miscellaneousincome.

The Companyoffersits ownproprietary creditcard tocustomers. Allcredit activityis performedby

theCompany'swholly-ownedsubsidiaries.Noneofthecreditcardreceivablesaresecured.The

Companyestimatedcustomercreditlossesof$

856,000

and$

654,000

forthetwelvemonthsended

January 31, 2026 and February 1, 2025,respectively, on sales purchased using the Company'sproprietary

creditcardof$

21.4

millionand$

21.8

millionforthetwelvemonthsendedJanuary31,2026and

February 1, 2025, respectively.

The following table provides information about receivablesand contract liabilities from contracts with

customers (in thousands):

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

Balance as of

January 31, 2026

February 1, 2025

Proprietary Credit Card Receivables, net

10,711

10,848

Gift Card Liability

7,475

7,541

Cost of Goods Sold:

Cost of goods soldincludes merchandise costs, net ofdiscounts and allowances,

buying costs, distribution costs, occupancy costs, freight,and inventory shrinkage. Net merchandise costs

andin-boundfreightarecapitalizedasinventorycosts.Buyinganddistributioncostsincludepayroll,

payroll-relatedcostsandoperatingexpensesfortheCompany'sbuyingdepartmentsanddistribution

center.Occupancy expenses include rent, realestate taxes, insurance, common areamaintenance, utilities

andmaintenanceforstoresanddistributionfacilities.Buying,distribution,occupancyandinternal

transfercostsaretreatedasperiodcostsandarenotcapitalizedaspartofinventory.Thedirectcosts

associated with shipping goods to customers are recorded as a componentof Cost of goods sold.

Advertising:

Advertisingcostsareexpensedintheperiodinwhichtheyareincurred.Advertising

expense was approximately $

4,908,000

, $

4,686,000

and $

6,277,000

for the fiscal years ended January 31,

2026, February 1, 2025 and February 3, 2024, respectively.

Stock Repurchase Program:

For the fiscal year ended January31, 2026, the Company had

680,740

sharesremaininginopenauthorizations.ThereisnospecifiedexpirationdatefortheCompany's

repurchase program. Share repurchases are recorded in Retainedearnings, net of par value.

Earnings (Loss) PerShare:

ASC 260-

Earnings PerShare

requires dualpresentation of basicEPS

and diluted EPS onthe face of allincome statements for allentities with complex capitalstructures.The

CompanyhaspresentedonebasicEPSandonedilutedEPSamountforallcommonsharesinthe

accompanying Consolidated Statements ofIncome (Loss) and ComprehensiveIncome (Loss).While the

Company's certificateof incorporation providesthe right forthe Boardof Directors todeclare dividends

on ClassA shareswithout declarationof commensuratedividends onClass Bshares, theCompany has

historically paid the same dividendsto both Class A andClass B shareholders and theBoard of Directors

has resolved tocontinue this practice.Accordingly, theCompany's allocationof income forpurposes of

EPScomputation isthesame forClassA andClass Bshares andtheEPSamounts reportedherein are

applicable to both Class A and Class B shares.

BasicEPSiscomputedasnetearnings(loss)lessearningsallocatedtonon-vestedequityawards

dividedbytheweightedaveragenumberofcommonsharesoutstandingfortheperiod.DilutedEPS

reflects the potential dilution that could occur from common shares issuable through stock options and the

Employee Stock Purchase Plan.

The followingtable reflectsthe basicand dilutedEPS calculationsfor thefiscal yearsended January

31, 2026, February 1, 2025 and February 3, 2024:

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

Numerator

(Dollars in thousands)

Net earnings (loss)

(5,909)

(18,057)

(23,941)

(Earnings) loss allocated to non-vested equity awards

(548)

1,347

Net earnings (loss) available to common stockholders

(5,909)

(18,605)

(22,594)

Denominator

Basic weighted average common shares outstanding

18,786,674

19,249,081

19,389,907

Diluted weighted average common shares outstanding

18,786,674

19,249,081

19,389,907

Net income (loss) per common share

Basic earnings (loss) per share

(0.31)

(0.97)

(1.17)

Diluted earnings (loss) per share

(0.31)

(0.97)

(1.17)

UnvestedrestrictedstockexcludedfromthecalculationofdilutedEPSforthefiscalyearsended

January31,2026,February1,2025,andFebruary3,2024were

974,000

1,200,000

,and

1,100,000

respectively,becausetheeffectofincludingtheminthecalculationofdilutedEPSwouldhavebeen

antidilutive.

ndorAllowances:

TheCompanyreceivescertainallowancesfrom

vendorsprimarilyrelatedto

purchase discounts and markdown anddamage allowances. All allowances arereflected in Cost ofgoods

soldasearnedwhentherelatedproductsaresold.Cashconsiderationreceivedfromavendoris

presumedtobeareductionofthepurchasecostofmerchandiseandisreflectedasareductionof

inventory.The Company does not receive cooperative advertising allowances.

IncomeTaxes:

TheCompanyfilesaconsolidatedfederalincometaxreturn.Incometaxesare

providedbasedontheassetandliabilitymethodofaccounting,wherebydeferredincometaxesare

providedfortemporarydifferencesbetweenthefinancialreportingbasisandthetaxbasisofthe

Company's assets and liabilities.

Unrecognized taxbenefits foruncertain taxpositions areestablishedinaccordancewithASC 740-

IncomeTaxes

("ASC740")when,despitethefactthatthetaxreturnpositionsaresupportable,the

Company believes these positions may be challenged andthe results are uncertain.The Company adjusts

theseliabilitiesinlightofchangingfactsandcircumstances.Potentialaccruedinterestandpenalties

relatedtounrecognized taxbenefitswithin operationsarerecognized asa componentofIncome before

income taxes.

The TaxCuts and JobsAct implemented anew minimum taxon global intangiblelow-taxed income

("GILTI"). The Company has elected to account for GILTItax in the period in which it is incurred, which

is included as a component of its current year provision for income taxes.

DeferredTaxValuationAllowance:

TheCompany assessesthelikelihoodthatdeferredtaxassets

willberealizedinlightoftheCompany'scurrentfinancialperformanceandprojectedfuturefinancial

performance. Based on thisassessment, the Company thendetermines if a valuationallowance should be

recorded.If theCompany concludes thatit ismore likely thannot thatthe Company willnot beable to

realize its tax deferred assets, a valuation allowance is recorded forthe proportion of the deferred tax asset

it determines may not be realized.

StoreOpeningCosts:

Costsrelatingtotheopeningofnewstoresortherelocatingor

expandingofexistingstoresareexpensedasincurred.Aportionofconstruction,design,andsite

selection costs are capitalized to new, relocated and remodeled stores.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

Insurance:

The Company is self-insured with respect to employee health care, workers' compensation

andgeneralliability.TheCompany'sself-insuranceliabilitiesarebasedonthetotalestimatedcostof

claims filed and estimates ofclaims incurred but not reported, lessamounts paid against such claims,and

arenot discounted.Management reviewscurrent andhistorical claimsdata indeveloping itsestimates.

The Company has stop-lossinsurance coverage for individual claims inexcess of $

375,000

for employee

healthcare, $

350,000

for workers' compensation and $

250,000

for general liability.

Fair Valueof Financial Instruments:

The Company'scarrying values offinancial instruments, such

ascashandcashequivalents,short-terminvestments,andrestrictedcash,approximate theirfairvalues

due to their short terms to maturity and/or their variable interest rates.

Stock BasedCompensation:

The Company recordscompensation expense associatedwith restricted

stockandotherformsofequitycompensationinaccordancewithASC718-

Compensation-Stock

Compensation.

Compensationcostassociatedwithstockawardsrecognizedinallyearspresented

includes: 1) amortization related tothe remaining unvested portion ofall stock awards basedon the grant

date fair value and 2) adjustments for the effects of actual forfeitures versus initialestimated forfeitures.

Recently AdoptedAccounting Pronouncements:

In December2023, theFASBissued ASU2023-

09,"IncomeTaxes(Topic740):ImprovementstoIncomeTaxDisclosures,"whichmodifiesthe

requirementsonincometaxdisclosurestorequiredisaggregatedinformationaboutareportingentity's

effective taxrate reconciliation, aswell as informationon income taxespaid.The Company adoptedthe

standardonaretrospective basiseffectiveforitsannualperiodended January31,2026.SeeNote 12,

"Income Taxes."

Recently Issued Accounting Pronouncements:

In November 2024, the FASBissued ASU 2024-03,

"Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic

220-40): Disaggregation of Income Statement Expenses," which requires public entities to disclose, on an

annual and interim basis, disaggregated information in the footnotes aboutspecified information related to

certain costsand expenses.Thisguidance iseffective forannual periodsbeginning afterDecember 15,

2026,andinterimperiodsbeginningafterDecember15,2027,withearlyadoptionpermitted.The

Company iscurrently inthe processof evaluatingthe potentialimpact ofadoption ofthis newguidance

on its consolidated financial statements and related disclosures.

TheCompany hasreviewedallotherrecentlyissuedaccountingpronouncements andbelievesnone

will have a material impact on the Company's financial statements.

2.Interest and Other Income:

The components of Interest and other income are shown below (in thousands):

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

Dividend income

(57)

(75)

(78)

Interest income

(4,002)

(5,019)

(3,919)

Miscellaneous income

(1,779)

(1,389)

(1,079)

Net gain on investment sales

(849)

(5,344)

(25)

Interest and other income

(6,687)

(11,827)

(5,101)

During fiscal2024, theCompany received$

8.6

million fromthe insuranceclaim settlementand sale

of its corporate jet, which had sustained damage in fiscal 2023.The Company recorded a net gain of $

3.2

million whichis includedin Interestand otherincome inthe accompanyingConsolidated Statementsof

Income (Loss) and Comprehensive Income (Loss) for the year ended February1, 2025.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

3.Short-Term Investments:

AtJanuary31,2026,theCompany'sinvestmentportfoliowasprimarilyinvestedincorporateand

governmental debtsecurities heldin managedaccounts.These securitiesare classifiedas available-for-

sale as they are highly liquid and are recorded on the Consolidated Balance Sheets at estimated fair value,

withunrealizedgainsandtemporarylossesreportednetoftaxesinAccumulatedothercomprehensive

income.

Thetablebelowreflectsgrossaccumulatedunrealizedgains(losses)inshort-terminvestmentsat

January 31, 2026 and February 1, 2025 (in thousands):

January 31, 2026

February 1, 2025

Debt securities

issued by the U.S.

Government, its various

States, municipalities

Corporate

States, municipalities

Corporate

and agencies

debt

and agencies

debt

of each

securities

Total

of each

securities

Total

Cost basis

2,037

54,548

56,585

5,878

51,392

57,270

Unrealized gains

274

163

Unrealized (loss)

(10)

Estimated fair value

2,037

54,822

56,859

5,868

51,555

57,423

AccumulatedothercomprehensiveincomeontheConsolidatedBalanceSheetsreflectsthe

accumulatedunrealizedgainsandlossesinshort-term investmentsinadditiontounrealizedgainsand

lossesfromequityinvestmentsandrestrictedcashinvestments.Thetablebelowreflectsgross

accumulated unrealizedgains andlosses inthese investmentsat January31, 2026and February1, 2025

(in thousands):

January 31, 2026

February 1, 2025

Deferred

Unrealized

Deferred

Unrealized

Tax Benefit/

Net Gain/

Unrealized

Tax Benefit/

Net Gain/

Security Type

Gain/(Loss)

(Expense)

(Loss)

Gain/(Loss)

(Expense)

(Loss)

Short-Term Investments

274

153

Total

274

153

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

4.Fair Value Measurements:

The following tables set forth information regarding the Company's financialassets that are measured

at fair value as of January 31, 2026 and February 1, 2025 (in thousands):

Prices in

Active

Significant

Markets for

Other

Significant

Identical

Observable

Unobservable

January 31, 2026

Assets

Inputs

Description

Level 1

Level 2

Level 3

Assets:

Corporate Bonds

54,822

U.S. Treasury/Agencies Notes and Bonds

2,037

Cash Surrender Value of Life Insurance

9,693

Total Assets

66,552

56,859

9,693

Liabilities:

Deferred Compensation

(8,383)

Total Liabilities

(8,383)

Prices in

Active

Significant

Markets for

Other

Significant

Identical

Observable

Unobservable

February 1, 2025

Assets

Inputs

Description

Level 1

Level 2

Level 3

Assets:

State/Municipal Bonds

1,244

Corporate Bonds

51,326

U.S. Treasury/Agencies Notes and Bonds

4,624

Cash Surrender Value of Life Insurance

9,301

Asset-backed Securities (ABS)

229

Total Assets

66,724

57,423

9,301

Liabilities:

Deferred Compensation

(8,548)

Total Liabilities

(8,548)

TheCompany'sinvestment portfolioat January31, 2026was primarilyinvested incorporate bonds

and taxable governmental debt securities held in managed accounts with underlying ratings of A or better.

Thecorporatebondshavecontractualmaturitieswhichrangefrom

14 days

2.6 years

.TheU.S.

Treasury notes have a contractual maturity of

15 days

Level 2investment securitiesinclude corporate,state andmunicipal bondsfor whichquoted pricesmay

not be available on active exchanges for identical instruments.Their fair value is principally based on market

values determined by management with the assistance of a third-party pricing service.Since quoted prices in

active marketsfor identical assetsare notavailable, these pricesare determinedby thepricing service using

observable market information such as quotes from less active markets and/or quoted prices of securities with

similar characteristics, among other factors.

Deferredcompensationplanassetsconsistprimarilyoflifeinsurancepolicies.Theselifeinsurance

policies are valued based on the cash surrender value of the insurance contract, which is determined based

onsuchfactorsasthefairvalueoftheunderlyingassetsanddiscountedcashflowandaretherefore

classifiedwithinLevel3ofthevaluationhierarchy.TheLevel3liabilityassociatedwiththelife

insurancepoliciesrepresentsadeferredcompensationobligation,thevalueofwhichistrackedvia

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

underlyinginsurancefunds'netassetvalues,asrecordedinOthernoncurrentliabilitiesinthe

Consolidated Balance Sheets. Thesefunds are designedto mirror thereturn of existingmutual funds and

money market funds that are observable and actively traded.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

The following tables summarizethe change in fairvalue of the Company'sfinancial assets and liabilities

measured using Level 3 inputs for theyears ended January 31, 2026 and

February 1, 2025

(in thousands):

Fair Value

Measurements Using

Significant Unobservable

Asset Inputs (Level 3)

Cash

Surrender Value

Beginning Balance at February 1, 2025

9,301

Redemptions

(365)

Total gains or (losses)

Included in interest and other income (or

changes in net assets)

757

Ending Balance at January 31, 2026

9,693

Fair Value

Measurements Using

Significant Unobservable

Liability Inputs (Level 3)

Deferred

Compensation

Beginning Balance at February 1, 2025

(8,548)

Redemptions

1,246

Additions

(206)

Total (gains) or losses

Included in interest and other income (or

changes in net assets)

(875)

Ending Balance at January 31, 2026

(8,383)

Fair Value

Measurements Using

Significant Unobservable

Asset Inputs (Level 3)

Cash

Surrender Value

Beginning Balance at February 3, 2024

8,586

Total gains or (losses)

Included in interest and other income (or

changes in net assets)

715

Ending Balance at February 1, 2025

9,301

Fair Value

Measurements Using

Significant Unobservable

Liability Inputs (Level 3)

Deferred

Compensation

Beginning Balance at February 3, 2024

(8,654)

Redemptions

1,175

Additions

(220)

Total (gains) or losses

Included in interest and other income (or

changes in net assets)

(849)

Ending Balance at February 1, 2025

(8,548)

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

Accounts Receivable:

Accounts receivable consist of the following (in thousands):

January 31, 2026

February 1, 2025

Customer accounts - principally deferred payment accounts

11,393

11,428

Income tax receivable

5,739

5,425

Miscellaneous receivables

5,066

3,365

Bank card receivables

3,946

4,903

Total

26,144

25,121

Less allowance for customer credit losses

682

581

Accounts receivable - net

25,462

24,540

Finance chargeand latechargerevenue oncustomer deferredpayment accountstotaled $

2,654,000

2,696,000

and $

2,640,000

for the fiscal

years ended January 31, 2026, February 1, 2025and February 3,

2024,respectively,andchargesagainsttheallowanceforcustomercreditlosseswereapproximately

856,000

654,000

and$

554,000

forthefiscalyearsendedJanuary31,2026,February1,2025and

February3,2024,respectively.Expensesrelatingtotheallowanceforcustomercreditlossesare

classifiedasacomponentofSelling,generalandadministrativeexpenseintheaccompanying

Consolidated Statements of Income (Loss) and Comprehensive Income(Loss).

Property and Equipment:

Property and equipment consist of the following (in thousands):

January 31, 2026

February 1, 2025

Land and improvements

13,593

Buildings

35,601

35,950

Leasehold improvements

72,407

72,608

Fixtures and equipment

156,916

161,950

Information technology equipment and software

35,659

33,751

Construction in progress

179

928

Total

314,355

318,780

Less accumulated depreciation

260,607

258,454

Property and equipment - net

53,748

60,326

Construction in progress primarily represents costs related to newstore development,

distribution center improvements and investments in new technology.

Accrued Expenses:

Accrued expenses consist of the following (in thousands):

January 31, 2026

February 1, 2025

Accrued employment and related items

7,456

8,189

Property and other taxes

11,784

13,261

Accrued self-insurance

8,592

8,593

Other

9,269

11,674

Total

37,101

41,717

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

8.Financing Arrangements:

On March 13, 2025,the Company,as borrower,and certain other domestic subsidiaries, asborrowers

andguarantors,enteredintoaCreditAgreement(the"ABLCreditAgreement")andrelatedloan

documents, by and among the Company, certain other of the Company'sdomestic subsidiaries, and Wells

FargoBank,NationalAssociation,asthelender(the"Lender"),toestablishanasset-basedrevolving

credit facility (the "ABL Facility") in an amount up to $

35.0

million. The proceeds from the ABL Facility

may be used to provide funding for ongoing working capital and generalcorporate purposes.

The ABL CreditAgreement is committedthrough

March 2028

and is securedprimarily by inventory

and third-partycredit cardreceivables. Therewere

borrowings outstandingand theavailability under

thefacilitywas$

30.0

millionbeforegivingeffecttoa$

3.0

millionoutstandingletterofcreditthat

reducedborrowing availabilityto$

27.0

million asof January31,2026.Theweighted averageinterest

rate under the credit facility was

zero

at January 31, 2026 due to

outstanding borrowings.

9.Stockholders' Equity:

TheholdersofClass ACommonStockareentitledto

one vote per share

,whereastheholdersof

Class B Common Stock are entitledto

ten votes per share

. Each share ofClass B Common Stock may be

converted at any time into one share of Class A Common Stock. Subject to the rights ofthe holders of any

shares ofPreferred Stockthat maybe outstandingat thetime, inthe eventof liquidation,dissolution or

windingupoftheCompany,holdersofClass ACommonStockareentitledtoreceiveapreferential

distribution of $

1.00

per share of thenet assets of the Company.Cash dividends on theClass B Common

Stock cannot bepaid unless cashdividends of atleast an equalamount are paidon the Class ACommon

Stock.

TheCompany'scertificate ofincorporationprovides thatsharesofClass B CommonStockmay be

transferredonlytocertain"PermittedTransferees"consistinggenerallyofthelinealdescendantsof

holdersofClass BCommonStock,trustsfortheirbenefit,corporationsandpartnerships controlledby

them and theCompany's employee benefitplans. Any transferof Class B Common Stockin violation of

theserestrictions,includingatransfertotheCompany,resultsintheautomaticconversionofthe

transferredsharesofClass BCommonStockheldbythetransfereeintoanequalnumberofsharesof

Class A Common Stock.

The changesin thenumber ofshares outstandingforthe threefiscal yearsended January31, 2026,

February 1, 2025, and February 3, 2024 are presented below (in thousands):

Convertible

Class A

Class B

Common Stock

January 28, 2023

18,723

1,764

Repurchases

(288)

Share-based compensation

368

February 3, 2024

18,803

1,764

Repurchases

(912)

Share-based compensation

423

February 1, 2025

18,314

1,764

Repurchases

(317)

Share-based compensation

(20)

January 31, 2026

17,977

1,764

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

10.Employee Benefit Plans:

TheCompanyhasadefinedcontributionretirementsavingsplan("401(k)plan")whichcoversall

associateswhomeetminimumageandservicerequirements.

The 401(k) plan allows participants to

contribute up to 75% of their annual compensation up to the maximum elective deferral, designated by

the Internal Revenue Service.

The Companyis obligatedto makea minimumcontribution tocover plan

administrative expenses.Further Companycontributionsareat thediscretion oftheBoard ofDirectors.

The Companycontributed $

310,000

for theyear endedJanuary 31,2026. TheCompany'scontributions

fortheyearsendedFebruary1,2025andFebruary3,2024wereapproximately$

and$

1,099,000

respectively.

The Company has a trusteed, non-contributory Employee Stock Ownership Plan ("ESOP"), which

covers substantially all associates who meet minimum age and service requirements.

The amountof the

Company's discretionarycontribution to the ESOPis determined by theCompensation Committee of the

Board ofDirectors andcan bemade inCompany ClassA Commonstock orcash. Dueto netoperating

losses infiscal 2025,fiscal 2024,and fiscal2023, theCommittee didnotapprove acontribution tothe

ESOP for the years ended January 31, 2026, February 1, 2025, and February3, 2024.

The Company is primarily self-insured for healthcare.These costs are significant primarily due to the

largenumber ofthe Company'sretail locationsand associates.The Company'sself-insurance liabilities

arebasedon thetotalestimated costsofclaims filedand estimatesofclaims incurredbut notreported,

lessamountspaidagainstsuchclaims.Managementreviewscurrentandhistoricalclaimsdatain

developing itsestimates. Ifthe underlyingfacts andcircumstances ofthe claimschange orthe historical

trend is not indicative of future trends, then the Company may be required to recordadditional expense or

areductiontoexpensewhichcouldbematerialtotheCompany'sreportedresultsofoperationsinthe

period recorded. The Company funds healthcare contributions to athird-party provider.

11.

Leases:

The Company determines whether anarrangement is a leaseat inception. The Company hasoperating

leases forstores,offices,warehouse spaceand equipment.Itsleaseshave remaininglease termsof

one

year

10 years

, some of which include options toextend the lease term for

up to five years

, and some of

whichincludeoptionstoterminatethelease

within one year

.TheCompanyconsiderstheseoptionsin

determiningthelease termusedtoestablish itsright-of-use assetsand leaseliabilities. TheCompany's

lease agreements do not contain any material residual value guarantees or materialrestrictive covenants.

AsmostoftheCompany'sleasesdonotprovideanimplicitrate,theCompanyusesitsestimated

incrementalborrowingratebasedontheinformationavailableatcommencementdateoftheleasein

determining the present value of lease payments.

The components of lease cost are shown below (in thousands):

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

Operating lease cost (a)

65,866

67,174

70,363

Variablelease cost (b)

2,490

2,275

2,646

(a) Includes right-of-use asset amortization of ($

0.2

) million, ($

0.8

) million, and ($

1.3

) million for the twelve months ended

January 31, 2026, February 1, 2025, and February 3, 2024 respectively.

(b) Primarily relates to monthly percentage rent for stores not presented on the balance sheet.

Supplemental cash flowinformation andnon-cash activityrelated tothe Company'soperating leases

are as follows (in thousands):

Operating cash flow information:

Fiscal Year Ended

January 31, 2026

February 1, 2025

February 3, 2024

Cash paid for amounts included in the measurement of

lease liabilities

57,518

60,717

65,872

Non-cash activity:

Right-of-use assets obtained in exchange for lease

obligations, net of rent violations

61,989

53,419

44,284

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

Weighted-averageremaining leaseterm anddiscount ratefor theCompany'soperating leasesare as

follows:

As of

January 31, 2026

February 1, 2025

Weighted-average remaining lease term

2.4

years

2.3

years

Weighted-average discount rate

6.27%

4.83%

MaturitiesofleaseliabilitiesbyfiscalyearfortheCompany'soperatingleasesareasfollows(in

thousands):

Fiscal Year

2026

63,976

2027

45,395

2028

31,084

2029

19,210

2030

10,229

Thereafter

1,333

Total lease payments

171,227

Less: Imputed interest

20,779

Present value of lease liabilities

150,448

12.Income Taxes:

Unrecognizedtaxbenefitsforuncertaintaxpositions,primarilyrecordedinOthernoncurrent

liabilities, are established in accordancewith ASC 740 when, despitethe fact that thetax return positions

aresupportable, theCompany believesthesepositions maybechallengedand theresultsareuncertain.

TheCompany adjuststheseliabilitiesinlightofchangingfactsandcircumstances.AsofJanuary31,

2026, theCompany hadgross unrecognizedtax benefitstotaling approximately$

1.9

million.Including

the gross unrecognized tax benefits,and interest and penalties, $

2.5

million would affect theeffective tax

rateifrecognized.TheCompanyhadapproximately$

1.0

million,$

1.7

millionand$

1.8

millionof

interest andpenalties accrued relatedto uncertain taxpositions as ofJanuary 31, 2026,February 1, 2025

andFebruary3,2024,respectively.TheCompanyrecognizesinterestandpenaltiesrelatedtothe

resolution ofuncertain taxpositions asa componentofincome taxexpense.The Companyrecognized

188,000

295,000

and$

393,000

ofinterestandpenaltiesintheConsolidatedStatementsofIncome

(Loss)andComprehensive Income(Loss)fortheyearsended January31,2026, February1,2025and

February3,2024,respectively.TheCompanyisnolongersubjecttoU.S.federalincometax

examinationsforyearsbefore2022.Instateandlocaltaxjurisdictions,theCompanyhaslimited

exposure before2015.During thenext 12months, variousstate andlocal taxingauthorities' statutesof

limitationswillexpireandcertainstateexaminationsmayclose,whichcouldresultinapotential

reduction of unrecognized tax benefits for which a range cannot be determined.

A reconciliationof thebeginning andending amountof grossunrecognized tax benefitsis asfollows

(in thousands):

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

January 31, 2026

February 1, 2025

February 3, 2024

Fiscal YearEnded

Balances, beginning

3,234

3,897

4,886

Additions for tax positions of the current year

374

Reduction for tax positions of prior years for:

Lapses of applicable statutes of limitations

(1,702)

(728)

(1,065)

Balances, ending

1,906

3,234

3,897

The (benefit) provision for incometaxes consists of the following (in thousands):

January 31, 2026

February 1, 2025

February 3, 2024

Fiscal YearEnded

Current income taxes:

Federal

(1,061)

(128)

(148)

State

(864)

395

(334)

Foreign

334

1,677

1,898

Total

(1,591)

1,944

1,416

Deferred income taxes:

Federal

6,613

State

2,093

Foreign

Total

8,724

Total income tax (benefit) expense

(1,591)

1,944

10,140

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

Significantcomponents oftheCompany's deferredtax assetsand liabilitiesas ofJanuary31,2026and

February 1, 2025 are as follows(in thousands):

January 31, 2026

February 1, 2025

Deferred tax assets:

Allowance for customer credit losses

145

124

Inventory valuation

1,412

1,584

Non-deductible accrued liabilities

1,045

1,587

Other taxes

780

834

Federal benefit of uncertain tax positions

403

655

Equity compensation expense

2,476

2,750

Federal tax credits

1,583

928

Net operating losses

17,629

11,147

Charitable contribution carryover

113

264

Lease liabilities

34,653

33,077

Property and equipment

3,412

4,735

Amortization

1,774

Other

1,513

1,776

Total deferredtax assets before valuation allowance

65,164

61,235

Valuationallowance

(25,394)

(23,151)

Total deferredtax assets after valuation allowance

39,770

38,084

Deferred tax liabilities:

Right-of-Use assets

39,660

38,000

Accrued self-insurance reserves

110

Total deferredtax liabilities

39,770

38,084

Net deferred tax assets

The changes in the valuation allowance are presented below:

January 31, 2026

February 1, 2025

February 3, 2024

ValuationAllowance Beginning Balance

(23,151)

(17,998)

(5,058)

Net ValuationAllowance (Additions) / Reductions

(2,243)

(5,153)

(12,940)

ValuationAllowance Ending Balance

(25,394)

(23,151)

(17,998)

As of January31, 2026, theCompany had $

9.9

million of netdeferred tax assetsattributable to statenet

operating loss carryforwards. The Company assessed thelikelihood that deferred tax assets related tostate net

operating losscarryforwards andother deferredtax assetsaffecting stateincome taxwill berealized. Based

on thisassessment, theCompany concludedthat itis morelikely thannot theCompany willnot beable to

realize $

9.9

million ofthe netoperating losses,and accordingly,has recordeda valuationallowance forthe

same amount.

Asof January31,2026, theCompanyhad$

15.5

millionofnetdeferred taxassetsattributable toU.S.

federal netoperatinglosscarryforwards,othercredit carryforwardsandallother deferredtax assetsnet of

deferred tax liabilities.The Company assessed the likelihood that deferred taxassets related to net operating

losscarryforwards,creditcarryforwardsandallotherremainingdeferredtaxassetsnetofdeferredtax

liabilities will berealized.Based on thisassessment, the Companyconcluded that itis more likelythan not

theCompanywillnotbeabletorealize$

7.7

millionofnetoperatinglosscarryforwards,$

1.6

millionof

credit carryforwards and $

6.2

million of remaining deferred tax assetsnet of deferred tax liabilities.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

The net changein the valuationallowance of $

2.2

million for theyear ended January31, 2026is due to

recording a valuation allowance of$

0.3

million against net deferred tax assetsattributable to U.S. federal net

operating losscarryforwards, othercredit carryforwardsand allother deferredtax assetsnet ofdeferred tax

liabilities, including $

1.9

million against state net operating losses. The net change in the valuation allowance

fortheyearendedFebruary1,2025relatestoU.S.federalnetoperatinglosscarryforwards,othercredit

carryforwards, allother deferredtax assetsnet ofdeferred taxliabilities, statenet operatinglosses andstate

tax credits.

AsofJanuary31,2026,theCompany'spositionisthatitsoverseassubsidiarieswillnotinvest

undistributedearningsindefinitely.Futureunremittedearningswhendistributedareexpectedtobeeither

distributionsofGILTI-previouslytaxed incomeor eligiblefora

100

%dividends receiveddeduction.The

withholdingtaxrateonanyunremittedearningsis

zero

andstateincometaxesonsuchearningsare

consideredimmaterial.Therefore,theCompanyhasnotprovideddeferredU.S.incometaxeson

approximately $

14.1

million of cumulative earnings from non-U.S. subsidiaries.

Domestic lossesof $

17.8

million, $

36.8

million,and $

38.0

million forthe fiscalyear endedJanuary

31,2026,February1,2025,andFebruary3,2024,respectively,wereoffsetbyprofitsinforeign

jurisdictions of $

10.3

million, $

20.7

million, and $

24.2

million, respectively.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

The reconciliation of the Company's effectiveincome tax rate with thestatutory rate is as follows:

January 31, 2026

February 1, 2025

February 3, 2024

U.S. Federal Statutory TaxRate

(1,575)

21.0

(3,384)

21.0

(2,898)

21.0

State and Local Income Taxes,Net of

Federal Income TaxEffect (a)

661

(8.8)

935

(5.8)

2,752

(19.9)

Foreign TaxEffects

Hong Kong

Tax Rate Differential

(453)

6.0

(922)

5.7

(1,082)

7.8

Offshore Claim

(1,372)

18.3

(1,739)

10.8

(2,098)

15.2

Other foreign jurisdictions

Effect of Changes in TaxLaws or Rates

Enacted in the Current Period

Change in Tax Rate

(2)

Effect of Cross-Border TaxLaws

Global intangible low-taxed income

1,970

(26.3)

3,969

(24.6)

4,577

(33.2)

Tax Credits

Research and development tax credits

(165)

2.2

(100)

0.6

(70)

0.5

Employment related tax credits

(655)

8.7

(309)

1.9

(207)

1.5

Other

(1)

(2)

Changes in ValuationAllowance

1,165

(15.5)

3,347

(20.8)

9,570

(69.3)

Nontaxable or Nondeductible items

Limitation on officer compensation

335

(4.5)

431

(2.7)

435

(3.1)

Addback on wage related credits

(1.3)

(0.4)

(0.3)

Share-based payment awards

247

(3.3)

(0.6)

Other

(49)

0.7

279

(1.7)

131

(1.1)

Changes in Unrecognized TaxBenefits

(1,796)

23.9

(723)

4.5

(1,017)

7.4

Effective TaxRate

(1,591)

21.2

1,944

(12.1)

10,140

(73.5)

(a) State taxes in South Carolina and Texasmade up the majority (greater than

%) of the tax effect in this category for

the years ended January 31, 2026, February 1, 2025, and February 3, 2024,respectively.

13.Reportable Segment Information:

The Company has determinedthat it has

four

operating segments, as definedunder ASC 280 - Segment

Reporting ("ASC 280"), including Cato, It'sFashion, Versona and Credit.The Company has

two

reportable

segments: Retailand Credit.The Companyhas aggregatedits

three

retail operatingsegments, includinge-

commerce, based on the aggregation criteria outlined in ASC 280-10, which statesthat two or more operating

segments maybe aggregatedinto asingle reportablesegment ifaggregation isconsistent withthe objective

andbasicprinciplesofASC280-10,whichrequirethesegmentstohavesimilareconomiccharacteristics,

products, production processes, clients and methods of distribution.

TheCompany'sretailoperatingsegmentshavesimilareconomiccharacteristicsandsimilaroperating,

financial andcompetitive risks.The productssold in eachretail operatingsegment aresimilar innature, as

theyallofferwomen'sapparel,shoesandaccessories.MerchandiseinventoryoftheCompany'sretail

operatingsegmentsissourcedfromthesamecountriesandsomeofthesamevendors,usingsimilar

production processes.Merchandise for the Company's retail operating segments is distributed to retail stores

inasimilarmannerthroughtheCompany'ssingledistributioncenterandissubsequentlydistributedto

customers in a similar manner.

The Company offers its own creditcard to its customers andall credit authorizations, payment processing

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

and collection efforts areperformed by awholly-owned subsidiary ofthe Company. TheCompany does not

allocate certain corporate expenses tothe Credit segment.

TheCompany'sPresidentandChiefExecutiveOfficeristheCompany'schiefoperatingdecision

maker("CODM").ThestructuredescribedabovereflectsthemannerinwhichtheCODMregularly

assesses information fordecision-making purposes, includingthe allocationof resources.The Company

also provides corporate services, including finance, information technology, and corporate administration,

to its segments whichare fully allocated tothe retail segment. Interestand other income fromassets held

forinvestmentandsalearenotincludedinassessingthesegments'performanceandthereforenot

allocated to either segment.

TheCODMmanagesandevaluatesthesegments'operatingperformancebasedonsegmentsales,

expenses, andsegment income(loss) beforeincome taxesas presentedin theCompany'sannual budget

andforecastingprocess,aswellasmonthlyanalysesofbudget-to-actualandprioryearvariances.

Segmentexpensesandotheritemsprimarilyincludecostofgoodssold,selling,generaland

administrativeexpenses,depreciationandinterestandotherincome.Assessmentandapprovalofall

capitalexpendituresaredeterminedtobeinsupportofandbasedontheneedsoftheretailsegment;

however,theCODMdoesnotevaluateperformanceorallocateresourcesbasedonsegmentasset

balancesand,therefore,totalsegmentassetsarenotpresentedinthetablesbelow.Themeasureof

segment assets is reported on the balance sheet as total consolidatedassets.

The accountingpolicies ofthe segments arethe sameas thosedescribed in theSummary ofSignificant

AccountingPoliciesinNote1.TheCompanyevaluatessegmentperformancebasedonsegmentincome

before income taxes.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

The following schedule summarizes certain segmentinformation (in thousands):

Fiscal 2025

Retail

Credit

Total

Total Revenues

651,158

2,654

653,812

Cost of goods sold (a)

431,551

Selling, general, and administrative (b)

157,738

1,617

159,355

Corporate overhead

67,107

Depreciation

9,986

Interest and other income

(375)

(1,148)

(1,523)

Segment income (loss) before income taxes

(14,849)

2,185

(12,664)

Corporate interest and other income

(5,164)

Loss before income taxes

(7,500)

Capital expenditures

3,763

Fiscal 2024

Retail

Credit

Total

Total Revenues

647,110

2,696

649,806

Cost of goods sold (a)

436,440

Selling, general, and administrative (b)

162,367

1,630

163,997

Corporate overhead

67,492

Depreciation

9,817

Interest and other income

(410)

(1,162)

(1,572)

Segment income (loss) before income taxes

(28,596)

2,228

(26,368)

Corporate interest and other income

(10,255)

Loss before income taxes

(16,113)

Capital expenditures

7,872

Fiscal 2023

Retail

Credit

Total

Total Revenues

705,419

2,640

708,059

Cost of goods sold (a)

464,313

Selling, general, and administrative (b)

176,205

1,632

177,837

Corporate overhead

74,940

Depreciation

9,871

Interest and other income

(267)

(737)

(1,004)

Segment income (loss) before income taxes

(19,643)

1,745

(17,898)

Corporate interest and other income

(4,097)

Loss before income taxes

(13,801)

Capital expenditures

12,532

(a) Refer to Note 1 for additional information on the components of Cost of goods sold.

(b) Selling, general, and administrative expense include corporate and store payroll, related payroll taxes

and benefits, insurance, supplies, advertising, bank and credit card processing fees.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

14.Stock Based Compensation:

AsofJanuary31,2026,theCompany's2018IncentiveCompensationPlanwasavailableforthe

grantingofvariousformsofequity-based awards,includingrestricted stockand stockoptions forgrant to

officers, directors and key employees.

The following table presents the number of options and shares of restrictedstock initially authorized

and available for grant under this plan as of January 31, 2026:

2018

Plan

Options and/or restricted stock initially authorized

4,725,000

Options and/or restricted stock available for grant:

February 1, 2025

2,797,601

January 31, 2026

2,869,806

In accordance with ASC 718, the fair value of restricted stock awards is estimated on the date of grant

basedonthemarketpriceoftheCompany'sstockandisamortizedtocompensationexpenseona

straight-line basisover a

five-year

vesting period.As ofJanuary 31,2026, therewas $

4,063,868

of total

unrecognized compensationexpense relatedto unvestedrestricted stockawards, whichis expectedto be

recognized over a remaining weighted-average vesting period of

1.4

years.The total grant date fair value

ofthesharesrecognizedascompensationexpenseduringthetwelvemonthsendedJanuary31,2026,

February 1,2025 andFebruary 3,2024 was$

1,647,000

, $

2,270,000

and$

4,105,000

, respectively.The

expensesareclassifiedasacomponentofSelling,generalandadministrativeexpensesinthe

Consolidated Statements of Income (Loss) and Comprehensive Income(Loss).

The following summary showsthe changes in theshares of unvestedrestricted stock outstandingduring

the years ended January 31, 2026,February 1, 2025 and February 3, 2024:

Weighted Average

Number of

Grant Date Fair

Value PerShare

Restricted stock awards at January 28, 2023

1,059,433

13.10

Granted

414,502

8.29

Vested

(217,238)

13.97

Forfeited or expired

(132,824)

11.73

Restricted stock awards at February 3, 2024

1,123,873

11.32

Granted

386,900

4.80

Vested

(232,696)

13.22

Forfeited or expired

(62,896)

9.21

Restricted stock awards at February 1, 2025

1,215,181

8.98

Granted

Vested

(225,924)

12.89

Forfeited or expired

(84,205)

8.27

Restricted stock awards at January 31, 2026

905,052

8.06

TheCompany'sEmployeeStockPurchasePlanallowseligiblefull-timeemployeestopurchasea

limitednumberofsharesoftheCompany'sClassACommonStockduringeachsemi-annualoffering

period ata

% discount throughpayroll deductions. Duringthe twelvemonth period endedJanuary 31,

2026, theCompany sold

51,845

shares toemployees at anaverage discount of$

0.49

per shareunder the

Employee Stock Purchase Plan.The compensation expenserecognized for the

% discount givenunder

theEmployeeStockPurchasePlanwasapproximately$

25,000

60,000

and$

67,000

forfiscalyears

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

2025, 2024 and 2023,respectively.These expenses are classifiedas a component ofSelling, general and

administrative expenses.

15.Commitments and Contingencies:

TheCompanyis,fromtimetotime,involvedinroutinelitigationincidentaltotheconductofits

business,includinglitigationregardingthemerchandisethatitsells,litigationregardingintellectual

property,litigation institutedby personsinjured uponpremises underour control,litigation withrespect

tovariousemploymentmatters,includingallegeddiscriminationandwageandhourlitigation,and

litigation with present or former employees.

Although suchlitigation isroutine andincidental tothe conductof theCompany'sbusiness, aswith

any businessof itssize witha significantnumber ofemployees andsignificant merchandisesales, such

litigation couldresult inlargemonetary awards.Based oninformation currentlyavailable, management

doesnotbelievethatanyreasonablypossiblelossesarisingfrom currentpending litigationwillhave a

material adverse effecton the Company'sconsolidated financial statements. However,given the inherent

uncertaintiesinvolvedinsuchmatters,anadverseoutcomeinoneormoreofsuchmatterscould

materially and adversely affect the Company'sfinancial condition, results of operations and cash flows in

anyparticularreportingperiod.TheCompanyaccruesforthesematterswhentheliabilityisdeemed

probable and reasonably estimable.

16.Accumulated Other Comprehensive Income:

The followingtable setsforth informationregarding thechanges inAccumulated othercomprehensive

income (in thousands) for theyear ended January 31, 2026:

Changes in Accumulated Other

Comprehensive Income (a)

Unrealized Gains

and (Losses) on

Available-for-Sale

Securities

Beginning Balance at February 1, 2025

153

Other comprehensive income (loss) before

reclassification

158

Amounts reclassified from accumulated

other comprehensive income (b)

(37)

Net current-period other comprehensive income (loss)

121

Ending Balance at January 31, 2026

274

(a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reductionto accumulated other

comprehensive income.

(b) Includes $

impact of Accumulated other comprehensive income reclassifications into Interest and other

income for net gains on available-for-sale securities. Thetax impact of this reclassification was $

. Amounts

in parentheses indicate a debit/reduction to accumulated other comprehensive income.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

The following table sets forth information regarding the changesin Accumulated other comprehensive

income (in thousands) for the year ended February 1, 2025:

Changes in Accumulated Other

Comprehensive Income (a)

Unrealized Gains

and (Losses) on

Available-for-Sale

Securities

Beginning Balance at February 3, 2024

395

Other comprehensive income (loss) before

reclassification

541

Amounts reclassified from accumulated

other comprehensive income (b)

(783)

Net current-period other comprehensive income (loss)

(242)

Ending Balance at February 1, 2025

153

(a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reductionto accumulated other

comprehensive income.

(b) Includes

$1,015

impact of Accumulated other comprehensive income reclassifications into Interest andother

income for net gains on available-for-sale securities. Thetax impact of this reclassification was $

232

. Amounts in

parentheses indicate a debit/reduction to accumulated other comprehensive income.

THE CATO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

The following table sets forth information regarding the changesin Accumulated other comprehensive

income (in thousands) for the year ended February 3, 2024:

Changes in Accumulated Other

Comprehensive Income (a)

Unrealized Gains

and (Losses) on

Available-for-Sale

Securities

Beginning Balance at January 28, 2023

(1,238)

Other comprehensive income (loss) before

reclassification

1,614

Amounts reclassified from accumulated

other comprehensive income (b)

Net current-period other comprehensive income (loss)

1,633

Ending Balance at February 3, 2024

395

(a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reductionto accumulated other

comprehensive income.

(b) Includes $

impact of Accumulated other comprehensive income reclassifications into Interest and other

income for net gains on available-for-sale securities. Thetax impact of this reclassification was $

. Amounts in

parentheses indicate a debit/reduction to accumulated other comprehensive income.

Item 9.

Changes in and Disagreements with Accountants on Accounting andFinancial Disclosure:

Not applicable.

Item 9A.

Controls and Procedures:

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Wecarried outan evaluation,with theparticipation ofour PrincipalExecutive Officerand Principal

Financial Officer,of theeffectiveness ofour disclosurecontrols andprocedures asof January31, 2026.

Based on thisevaluation, our PrincipalExecutive Officer andPrincipal Financial Officerconcluded that,

asof January31, 2026,our disclosurecontrols andprocedures, asdefined inRule 13a-15(e),under the

Securities Exchange Actof 1934(the "ExchangeAct"), were effectiveto ensure thatinformation we are

required todisclose inthe reportsthat wefile orsubmit underthe ExchangeAct isrecorded, processed,

summarizedandreportedwithinthetimeperiodsspecifiedintheSEC'srules andformsandthatsuch

informationisaccumulatedandcommunicatedtoourmanagement,includingourPrincipalExecutive

OfficerandPrincipalFinancialOfficer,asappropriatetoallowtimelydecisionsregardingrequired

disclosure.

Management's Report on Internal Control Over Financial Reporting

Management isresponsibleforestablishingandmaintaining adequateinternalcontroloverfinancial

reporting, as defined in Exchange Act Rule 13a-15(f).Under the supervision and with the participation of

ourmanagement, includingourPrincipalExecutive OfficerandPrincipalFinancialOfficer,wecarried

outanevaluationoftheeffectivenessofourinternalcontroloverfinancialreportingasofJanuary31,

2026basedonthe

InternalControl-IntegratedFramework

(2013)

issuedbytheCommitteeof

SponsoringOrganizationsoftheTreadwayCommission("COSO").Basedonthisevaluation,

management concludedthat ourinternal controlover financialreporting waseffective asof January31,

2026.

PricewaterhouseCoopersLLP,anindependentregisteredpublicaccountingfirm,hasauditedthe

effectiveness of our internalcontrol over financial reporting asof January 31, 2026, asstated in its report

which is included herein.

Changes in Internal Control Over Financial Reporting

NochangeintheCompany'sinternalcontroloverfinancialreporting(asdefinedinExchangeAct

Rule13a-15(f))hasoccurredduringtheCompany'sfiscalquarterendedJanuary31,2026thathas

materiallyaffected,orisreasonablylikelytomateriallyaffect,theCompany'sinternalcontrolover

financial reporting.

Inherent Limitations on Effectiveness of Controls

TheCompany'smanagement,includingitsPrincipalExecutiveOfficerandPrincipalFinancial

Officer,does notexpect ourdisclosure controlsand proceduresor internalcontrols toprevent allerrors

and allfraud. Acontrol system, nomatter howwell conceived oroperated, can provideonly reasonable,

not absolute,assurance thatthe objectivesof thecontrol system aremet. Further,the designof acontrol

systemmustreflectthefactthatthereareresourceconstraints,andthebenefitsofcontrolsmustbe

considered relative to their costs.Because of the inherent limitationsin all control systems,no evaluation

ofcontrolscanprovideabsoluteassuranceallcontrolissuesandinstancesoffraud,ifany,withinthe

company havebeen detected.These inherentlimitations includethe realitiesthat judgmentsin decision-

making can be faulty and that breakdowns can occur because of simpleerror or mistake. Controls can also

becircumventedbytheindividualactsofsomepersons,bycollusionoftwoormorepeople,orby

managementoverrideofthecontrols.Thedesignofanysystemofcontrolsisbasedinpartoncertain

assumptions about the likelihoodof future events,and there canbe no assurance anydesign will succeed

inachievingitsstatedgoalsunderallpotentialfutureconditions.Overtime,controlsmaybecome

inadequate because of changesin conditions ordeterioration in the degreeof compliance with policiesor

procedures.Becauseofthe inherentlimitations inacost-effectivecontrolsystem, misstatementsdue to

error or fraud may occur and not be detected.

Item 9B.

Other Information:

DuringthethreemonthsendedJanuary31,2026,noneoftheCompany'sdirectorsorofficers(as

definedinRule 16a-1(f)oftheSecurities ExchangeActof1934,asamended)

adopted

terminated

"Rule10b5-1 trading arrangement" or a "

non

Rule10b5-1

trading arrangement" (as such terms are defined

in Item 408 of Regulation S-K).

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PARTIII

Item 10.

Directors, Executive Officers and Corporate Governance:

Informationcontainedunderthecaptions"ElectionofDirectors,""MeetingsandCommittees,"

"CorporateGovernanceMatters"and"DelinquentSection16(a)Reports"intheRegistrant'sProxy

Statementforits2026annualstockholders'meeting(the"2026ProxyStatement")isincorporatedby

referenceinresponsetothisItem 10.TheinformationinresponsetothisItem 10regardingexecutive

officersof theCompany iscontained inItem 3A, Part Ihereof underthe caption"Executive Officersof

the Registrant."

Item 11.

Executive Compensation:

Information contained under the captions"2025 Executive Compensation" (except forthe information

undertheheading"PayVersusPerformance"),"FiscalYear2025DirectorCompensation,"and

"CorporateGovernanceMatters-CompensationCommitteeInterlocksandInsiderParticipation"inthe

Company's 2026 Proxy Statement is incorporated by reference in response to this Item.

Item 12.

Security Ownership of Certain Beneficial Owners and Management andRelated Stockholder

Matters:

Equity Compensation Plan Information

Thefollowingtableprovidesinformationaboutstockoptionsoutstandingandsharesavailablefor

future awards under all of the Company's equity compensation plans. The information is as of January31,

2026.

(a)

Number of Securities to

be Issued upon

Exercise of

Outstanding Options,

Warrants and Rights

(1)

(b)

Weighted-Average

Exercise Price of

Outstanding Options,

Warrants and Rights

(1)

(c)

Number of Securities

Remaining Available

for Future Issuance

Under Equity

Compensation Plans

(Excluding Securities

Reflected in Column

(a)) (2)

Plan Category

Equity compensation plans approved

by security holders

3,152,335

Equity compensation plans not

approved by security holders

Total

3,152,335

(1)

There are no outstanding stock options, warrants or stock appreciationrights.

(2)

Includes the following:

UndertheCompany'sstockincentiveplan,referredtoasthe2018

IncentiveCompensationPlan,2,869,806sharesareavailableforgrant.Underthisplan,non-

qualified stock options may be granted to key associates.

UndertheEmployeeStockPurchasePlan,282,529sharesareavailable.Eligibleassociatesmay

participateinthepurchaseofdesignatedsharesoftheCompany'scommonstock.Thepurchase

price ofthis stockis equalto 85%of thelower ofthe closingprice atthe beginningor theend of

each semi-annual stock purchase period.

Information contained under "Security Ownership of Certain Ownersand Management" in the

2026 Proxy Statement is incorporated by reference in response to this Item.

Item 13.

Certain Relationships and Related Person Transactions, and Director Independence:

Informationcontainedunderthecaption"CertainRelationshipsandRelatedPersonTransactions,"

"CorporateGovernanceMatters-DirectorIndependence"and"MeetingsandCommittees"inthe2026

Proxy Statement is incorporated by reference in response to this Item.

Item 14.

Principal Accountant Fees and Services:

Information containedunder thecaptions "RatificationofIndependent RegisteredPublic Accounting

Firm-Audit Fees"and"-Policy onAuditCommittee Pre-ApprovalofAuditand PermissibleNon-Audit

ServicesbytheIndependentRegisteredPublicAccountingFirm"inthe2026ProxyStatementis

incorporated by reference in response to this Item.

PARTIV

Item 15.

Exhibits and Financial Statement Schedules:

(a) The following documents are filed as part of this report:

(1) Financial Statements:

Page

Report of Independent Registered Public Accounting Firm....................................................................

Consolidated Statements of Income (Loss) and Comprehensive Income(Loss) for the fiscal

years ended January 31, 2026, February 1, 2025 and February 3, 2024................................................

Consolidated Balance Sheets at January 31, 2026 and February1, 2025.................................................

Consolidated Statements of Cash Flows for the fiscal years endedJanuary 31, 2026, February 1, 2025

and February 3, 2024 ................................................................................................................................

Consolidated Statements of Stockholders' Equity for the fiscal years endedJanuary 31, 2026,

February 1, 2025 and February 3, 2024....................................................................................................

Notes to Consolidated Financial Statements.............................................................................................

(2) Financial Statement Schedule: The following report andfinancial statement schedule is filed

herewith:

Schedule II - Valuation and Qualifying Accounts .................................................................................

Allotherschedulesareomittedastherequiredinformationisinapplicableortheinformationis

presented in the Consolidated Financial Statements or related Notes thereto.

(3) Index to Exhibits: Thefollowing exhibits listed inthe Index below arefiled or furnished withthis

report or,as noted,incorporated byreference herein.The Companywill supplycopies ofthe following

exhibitstoany shareholderuponreceiptofawritten requestaddressed totheCorporate Secretary,The

Cato Corporation,8100 DenmarkRoad, Charlotte,NC 28273and thepayment of$.50 perpage tohelp

defray the costs of handling, copying and postage.In most cases, documents incorporated by reference to

exhibitstoourregistrationstatements,reportsorproxystatementsfiledbytheCompanywiththe

SecuritiesandExchange Commissionareavailable tothepublicovertheInternet fromtheSEC'sweb

site at http://www.sec.gov.

Exhibit

Number

Description of Exhibit

3.1

Registrant's Amended and Restated Certificate of Incorporation, incorporated by reference

to Exhibit 3.1 to Form 10-Q of the Registrant for the quarter ended May 2, 2020.

3.2

Registrant's Amended and Restated By Laws, incorporated by reference to Exhibit 3.2 to

Form 10-Q of the Registrant for the quarter ended May 2, 2020.

4.1

Description of the Registrant's Securities Registered Pursuant to Section 12 of the

Securities Exchange Act of 1934, incorporated by reference to Exhibit 4.1 to Form 10-K of

the Registrant for the year ended February 1, 2020.

10.1*

The Cato Corporation 2021 Employee Stock Purchase Plan (Amended and Restated as of

October 1, 2025) incorporated by reference to Appendix A to Proxy Statement of the

Registrant filed on April 10, 2025.

10.2*

2013 Incentive Compensation Plan, incorporated by reference to Exhibit 4.1 to Form S-8

of the Registrant filed May 31, 2013 (SEC file No. 333-188993).

10.3*

2018 Incentive Compensation Plan, incorporated by reference to Exhibit 99.1 to Form S-8

of the Registrant filed June 1, 2018 (SEC file No. 333-225350).

10.8*

Deferred Compensation Plan effective July 28, 2011, incorporated by reference to Exhibit

10.1 to Form 8-K of the Registrant filed on July 19, 2011.

10.9*

Letter Agreement between the Registrant and Charles Knight dated as of January 4, 2022,

incorporated by reference to Exhibit 10.1 to Form 8-K of the Registrant filed on January 6,

2022.

10.10

Credit Agreement, dated as of March 13, 2025, by and among Wells Fargo Bank, National

Association, as Lender, and The Cato Corporation and certain of its subsidiaries as

Borrowers and certain of its other subsidiaries as Guarantors, incorporated by reference to

Exhibit 10.1 to Form 8-K of the Registrant filed March 19, 2025.

19.1**

Insider Trading Policy of the Registrant, incorporated by reference to Exhibit 19.1 to Form

10-K of the Registrant for the fiscal year ended February 1, 2025.

21.1**

Subsidiaries of Registrant.

23.1**

Consent of Independent Registered Public Accounting Firm.

31.1**

Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.

31.2**

Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.

32.1**

Section 1350 Certification of Chief Executive Officer.

32.2**

Section 1350 Certification of Chief Financial Officer.

97.1

Registrant's Dodd-Frank Clawback Policy, incorporated by reference to Exhibit 97.1 to

Form 10-K of the Registrant for the fiscal year ended February 3, 2024.

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definitions Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104.1

Cover Page Interactive Data File (Formatted in Inline XBRL andcontained in the Interactive

Data Files submitted as Exhibit 101.1**).

___________

* Management contract or compensatory plan required to be filed under Item 15 of this report and Item601

of Regulation S-K.

** Filed or submitted electronically herewith.

Item 16.

Form 10-K Summary:

Not applicable.

SIGNATURES

PursuanttotherequirementsofSection 13or15(d)oftheSecuritiesExchangeActof1934,Catohasduly

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

The Cato Corporation

/s/ JOHN P.D. CATO

/s/ CHARLES D. KNIGHT

John P.D. Cato

Chairman, President and

Chief Executive Officer

Charles D. Knight

Executive Vice President

Chief Financial Officer

/s/ JEFFREY R. SHOCK

Jeffrey R. Shock

Senior Vice President

Controller

Date: March 25, 2026

Pursuant to therequirements of theSecurities ExchangeAct of 1934,this report hasbeen signed belowon March 25,2026

by the following persons on behalf of the Registrant and in the capacities indicated:

/s/ JOHN P.D. CATO

John P.D. Cato

(President and Chief Executive Officer

(Principal Executive Officer) and Director)

/s/ BAILEY W.PATRICK

Bailey W.Patrick

(Director)

/s/ CHARLES D. KNIGHT

Charles D. Knight

(Executive Vice President

Chief Financial Officer (Principal Financial Officer))

/s/ THOMAS B. HENSON

Thomas B. Henson

(Director)

/s/ JEFFREY R. SHOCK

Jeffrey R. Shock

(Senior Vice President

Controller (Principal Accounting Officer))

/s/ BRYANF. KENNEDYIII

Bryan F. Kennedy III

(Director)

/s/ D. HARDING STOWE

D. Harding Stowe

(Director)

/s/ THERESA J. DREW

Theresa J. Drew

(Director)

/s/ PAMELAL. DAVIES

Pamela L. Davies

(Director)

Schedule II

VALUATIONAND QUALIFYING ACCOUNTS

(in thousands)

Allowance

for

Customer

Self Insurance

Credit Losses(a)

Reserves(b)

Balance at January 28, 2023

761

7,673

Additions charged to costs and expenses

578

16,063

Additions (reductions) charged to other accounts

(c)

467

Deductions

(706)

(d)

(15,075)

Balance at February 3, 2024

705

9,128

Additions charged to costs and expenses

654

14,304

Additions (reductions) charged to other accounts

(c)

(522)

Deductions

(843)

(d)

(14,791)

Balance at February 1, 2025

581

8,119

Additions charged to costs and expenses

856

14,570

Additions (reductions) charged to other accounts

(c)

162

Deductions

(816)

(d)

(14,810)

Balance at January 31, 2026

682

8,041

(a)Deducted from trade accounts receivable.

(b)Reserve for Workers' Compensation,General Liability and Healthcare.

(c)Recoveries of amounts previously written off.

(d)Uncollectible accounts written off.

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