NEWS RELEASE

FOR IMMEDIATE RELEASE

For Further Information Contact:

Charles D. Knight

Executive Vice President

Chief Financial Officer

InvestorRelations@catocorp.com

CATO REPORTS4Q AND FULL YEAR LOSS

CHARLOTTE, N.C. (March 19, 2026) – The Cato Corporation (NYSE: CATO) today reported a net loss of ($10.7)

million or ($0.55) per diluted share for the fourth quarter endedJanuary 31, 2026, compared to a net loss of ($14.1)

million or ($0.74) per diluted share for the fourth quarter ended February1, 2025.

Full-year fiscal 2025 net loss

was ($5.9) million or ($0.31) per diluted share compared to a net loss of ($18.1)million or ($0.97) per diluted share for

2024.

Sales for the fourth quarter ended January 31, 2026 were $150.0 million,a decrease of 3.4% from sales of $155.3 million

for the fourth quarter ended February 1, 2025. Same-store salesfor the fourth quarter were flat compared to 2024.

For the

year, the Company's sales increased 0.7% to $646.8 million from 2024 sales of $642.1 million.

Year-to-date same-store

sales increased 4% compared to 2024.

"Compared to 2024,

our fiscal 2025 sales trend was encouraging although 2024was negatively impacted by supply chain

interruptions which caused late merchandise to our stores, as well as moresevere weather events including three

hurricanes,

” said John Cato, Chairman, President, and Chief Executive Officer.

“During 2025 we continued to focus on

improving our merchandise offering, serving the customer, controlling expenses, and leveraging the investmentsin our

store and distribution center technologies

.

”

Fourth-quarter gross margin increased from 28.0% of sales in 2024 to 29.2% of sales in 2025primarily due to decreases

in payroll and occupancy costs, partially offset by higher sales of markdown product.

Selling, general and administrative

(SG&A) expenses decreased $1.9 million in the quarter.SG&A as a percent of sales increased slightly from 37.8% in

2024 to 37.9% in 2025 during the quarter.

Income tax benefit for the quarter was $1.1 million compare

d to expense of

$0.3 million last year.

For the full year 2025, gross margin increased from 32.0% of sales in 2024 to 33.3%of sales in 2025. This increase was in

part due to

lower payroll, distribution, and

freight costs, partially offset by higher sales of markdown product. SG&A

expenses decreased to 35.0% of sales in 2025 compared to 36.0% of sales in2024. The SG&A decrease was primarily due

to

lower payroll costs,closed store, and impairment expenses.

For the year,

SG&A expenses decreased $5.0 million.

Income tax benefit for the year was $1.6 million compared to expense of$1.9 million las

t year.

“As we look ahead to 2026, we are focused on improvingour merchandise assortment including new product offerings,

leveraging our investments in technology, especially in our stores and the distribution center, while continuing to provide

excellent customer service,” stated Mr. Cato. “Our 2026 outlook is tempered by the current economic uncertaintiesand

continued pressure on our customers’ disposable income.”

During 2025, the Company closed 48 stores. As of January 31, 2026,the Company operated 1,069 stores in 31 states,

compared to 1,117 stores in 31 states as of February 1, 2025. During 2026, the Companyplans to open up to 10 new

stores and close up to 40 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 appareland accessories operating three

concepts, “Cato,” “Versona” and “It’sFashion.”The Company’s Cato stores offer exclusive merchandise with fashion

and quality comparable to mall specialty stores at low prices everyday. 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 Versonamerchandise 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’sexpected or estimated operational financial

results, activities or opportunities, and potential impacts and effects of events, risks or contingenciesare considered

“forward-looking” within the meaning of The Private Securities Litigation Reform Act of1995.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 and publichealth conditions

and uncertainties, levels of unemployment, fuel, energy and food costs, inflation, wage rates, taxrates, interest rates,

home values, consumer net worth and the availability of credit; changes in laws or regulations affecting our business,

including but not limited to tariffs and taxes; 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 open new stores in attractive locations and the

ability of any such new stores to grow and perform as expected; underperformance or other factors that may lead to a

continuation or acceleration of store closures and negative affect on the Company’sprofitability; adverse weather,public

health threats,acts of war or aggression or similar conditions that may affect our sales or operations;inventory risks due

to shifts in market demand, including the ability to liquidate excess inventoryat anticipated margins; and other factors

discussed under “Risk Factors” in Part I, Item 1Aof the Company’smost 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 thereinwill not be realized. The Company is not responsible for any changes made

to this press release by wire or Internet services.

* * *

THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTSOF INCOME (UNAUDITED)

FOR THE PERIODS ENDED January 31, 2026 AND February 1,2025

(Dollars in thousands, except per share data)

Quarter Ended

Twelve Months Ended

January 31,

%

February 1,

%

January 31,

%

February 1,

%

2

0

2

6

Sales

2

0

2

5

Sales

2

0

2

6

Sales

2

0

2

5

Sales

REVENUES

Retail sales

$

150,019

100.0%

$

155,292

100.0%

$

646,830

100.0%

$

642,140

100.0%

Other revenue (principally finance,

late fees and layaway charges)

1,640

1.1%

2,617

1.7%

6,982

1.1%

7,666

1.2%

Total revenues

151,659

101.1%

157,909

101.7%

653,812

101.1%

649,806

101.2%

GROSS MARGIN (Memo)

43,770

29.2%

43,434

28.0%

215,279

33.3%

205,700

32.0%

COSTS AND EXPENSES, NET

Cost of goods sold

106,249

70.8%

111,858

72.0%

431,551

66.7%

436,440

68.0%

Selling, general and administrative

56,792

37.9%

58,680

37.8%

226,462

35.0%

231,489

36.0%

Depreciation

2,454

1.6%

2,711

1.7%

9,986

1.5%

9,817

1.5%

Interest and other income

(1,912)

-1.3%

(1,618)

-1.0%

(6,687)

-1.0%

(11,827)

-1.8%

Costs and expenses, net

163,583

109.0%

171,631

110.5%

661,312

102.2%

665,919

103.7%

Income Before Income Taxes

(11,924)

-7.9%

(13,722)

-8.8%

(7,500)

-1.2%

(16,113)

-2.5%

Income Tax Expense

(1,063)

-0.7%

330

0.2%

(1,591)

-0.2%

1,944

0.3%

Net Income (Loss)

$

(10,861)

-7.2%

$

(14,052)

-9.0%

$

(5,909)

-0.9%

$

(18,057)

-2.8%

Basic Earnings Per Share

$

(0.55)

$

(0.74)

$

(0.31)

$

(0.97)

Diluted Earnings Per Share

$

(0.55)

$

(0.74)

$

(0.31)

$

(0.97)

THE CATO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

November 1,

February 1,

2025

2025

(Unaudited)

(Unaudited)

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

25,462

24,540

Merchandise inventories

83,696

110,739

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

$

421,419

$

452,361

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

$

102,385

$

130,684

Current Lease Liability

53,507

57,555

Noncurrent Liabilities

11,272

13,485

Lease Liability

96,941

88,341

Stockholders' Equity

157,314

162,296

TOTAL

$

421,419

$

452,361