The Cato Corporation reported net income of $1.1 million ($0.06 diluted EPS) for the second quarter ended August 1, 2026, a significant decline from $6.8 million ($0.35 diluted EPS) in the prior year period. Sales fell 6% to $163.9 million, driven by a 3.7% same-store sales decrease and the closure of eight stores during the quarter. Gross margin contracted from 36.2% to 32.8%, while SG&A expenses as a percentage of sales rose slightly to 33.0%. The company cited persistent inflation, higher fuel prices, and elevated interest rates as pressures on customer discretionary income, anticipating continued challenges in the back half of 2026. As of August 1, 2026, the retailer operated 1,057 stores across 31 states. The Cato Corporation is a specialty retailer of value-priced fashion apparel and accessories operating the Cato, Versona, and It’s Fashion concepts.