Cato swings to operating loss on tariff costs, markdowns; net income -83% to $1.1M

Filed August 27, 2026 · Period ending August 1, 2026 · Compared to 10-Q Aug 28, 2025 · ~2 min read

Key Changes

• high

  Operating income swung from $5.5M profit to a $618,000 loss in Q2 FY2026, driven by higher cost of goods sold (67.2% vs. 63.8% of retail sales) from increased markdowns and occupancy deleveraging.

  MD&A: Operating Income verify on EDGAR →
• high

  Net income fell 83.2% to $1.1M ($0.06 diluted EPS, down 82.9%) despite a one-time $5.7M IEEPA tariff refund that reduced cost of goods sold by 1.7% of retail sales for the six-month period.

  MD&A: IEEPA Refund / Key Financials verify on EDGAR →
• high

  Same-store sales declined 3.7% vs. +9% growth in Q2 FY2025, as customers faced continued pressure from higher fuel prices, persistent inflation, and elevated interest rates.

  MD&A: Same-Store Sales verify on EDGAR →