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For the full year 2024, gross margin decreased from 33.7% of sales in 2023 to 32.0% of sales in 2024.  This decrease was in part due to higher distribution and freight costs and deleveraging of our occupancy costs.  SG&A expenses decreased to 36.0% of sales in 2024 compared to 36.1% of sales in 2023.  The SG&A rate decrease was primarily due to decreased incentive compensation, insurance, closed store and impairment expenses partially offset by increased payroll expenses as a percent of sales.   For the year, SG&A expenses decreased $21.3 million. Income tax expense for the year was $1.9 million compared to expense of $10.1 million last year.  The decrease in tax expense for the year was due primarily to a non-cash valuation allowance recorded against U.S. federal and state deferred tax assets last year.

"As we look ahead to 2025, we remain cautious in this challenging economic environment with pressures related to newly implemented tariffs and the uncertainty of potential additional tariffs," stated Mr. Cato.  "In 2025, we will continue our focus on reducing expenses. To this end, we eliminated approximately 40 corporate positions in February. We also expect expense reductions in other areas of our business as we continue our productivity and efficiency initiatives including reductions in our distribution and domestic freight expenses.  We will continue our initiatives on improving our merchandise assortment, including introducing new offerings."

During 2024, the Company opened one store, relocated four stores and permanently closed 62 stores.  As of February 1, 2025, the Company operated 1,117 stores in 31 states, compared to 1,178 stores in 31 states as of February 3, 2024.  During 2025, the Company plans to open up to 15 new stores and close up to 50 underperforming stores as leases expire.  These store closings are anticipated to have minimal financial impact.

The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories operating three concepts, "Cato," "Versona" and "It's Fashion."  The Company's Cato stores offer exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices every day.  The Company also offers exclusive merchandise found in its Cato stores at www.catofashions.com.  Versona is a unique fashion destination offering apparel and accessories including jewelry, handbags and shoes at exceptional prices every day.  Select Versona merchandise can also be found at www.shopversona.com.  It's Fashion offers fashion with a focus on the latest trendy styles for the entire family at low prices every day.

Statements in this press release that express a belief, expectation or intention, as well as those that are not a historical fact, including, without limitation, statements regarding the Company's expected or estimated operational financial results, activities or opportunities, and potential impacts and effects of interest rates, inflation or other factors that may affect our customers' disposable income or our costs, are considered "forward-looking" within the meaning of The Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are based on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the forward-looking statements.  Such factors include, but are not limited to, any actual or perceived deterioration in the conditions that drive consumer confidence and spending, including, but not limited to, prevailing social, economic, political, geopolitical, and public health conditions and uncertainties, levels of unemployment, fuel, energy and food costs, inflation, wage rates, tax rates, interest rates, home values, consumer net worth and the availability of credit; changes in laws,  regulations or government policies affecting our business, including but not limited to tariffs; uncertainties regarding the impact of any governmental action regarding, or responses to, the foregoing conditions; competitive factors and pricing pressures; our ability to predict and respond to rapidly changing fashion trends and consumer demands; our ability to successfully implement our new store development strategy to increase new store openings and the ability of any such new stores to grow and perform as expected; adverse weather, public health threats (such as  COVID-19) or similar conditions that may affect our sales or operations; inventory risks due to shifts in market demand, including the ability to liquidate excess inventory at anticipated margins; adverse developments or volatility affecting the financial services industry or broader financial markets; and other factors discussed under "Risk Factors" in Part I, Item 1A  of the Company's most recently filed annual report on Form 10-K and in other reports the Company files with or furnishes to the SEC from time to time.  The Company does not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any changes made to this press release by wire or Internet services.

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SOURCE Cato Corporation