The Cato Corporation (NYSE: CATO) announced on September 18, 2026, that it plans to close approximately 70 additional underperforming stores during the third and fourth quarters of fiscal 2026. This update brings the total number of planned store closures for the fiscal year to approximately 120 locations.
The company stated that it reviews roughly one-third of its stores annually to determine if lease options should be exercised or extended based on performance metrics such as sales trends and profitability. In previous years, the company renewed marginal stores for an additional year to allow time for improvement. However, citing the current economic environment and negative pressure on customer discretionary income, the company does not expect these stores to improve significantly.
John Cato, Chairman, President, and Chief Executive Officer, noted that the additional closures are expected to have a positive impact on operating results for fiscal 2027 and beyond.
The company anticipates incurring exit costs between $1.0 million and $1.3 million to close these additional locations by the end of 2026. These costs are primarily associated with the disposal of external signage and fixtures and the return of store systems to corporate headquarters. As all of the stores being closed are at the end of their lease terms, the company will not be responsible for paying rent at these locations beyond 2026.
