Cato to Close 120 Stores Amidst Inflationary Pressures and Weakened Consumer Spending

The Cato Corporation, parent company of Cato Fashions, announced it will close 120 of its women's apparel and accessories stores by the end of fiscal 2026. This figure represents over 10% of its total store base and is an increase from previously stated closure plans.

The decision comes as the company reported a significant decline in its second-quarter net income, falling to $1.1 million from $6.8 million in the same period last year. Sales also decreased to $163.9 million from $174.7 million year-over-year.

CEO John Cato attributed the financial performance to "continued pressure on our customers' discretionary income, which is being negatively impacted in part by persistent inflation, higher fuel prices and continued elevated interest rates." The company regularly reviews store performance, but current economic conditions have led to accelerating closures of underperforming locations.

Cato Corporation operates over 1,000 stores under its Cato Fashions, Versona, and It's Fashion brands across 31 states. The company has not disclosed the specific locations of the stores slated for closure. Its stock has experienced a notable decline throughout the year, though it saw a slight increase following the announcement of the expanded store closures. The company is headquartered in Charlotte, North Carolina.