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NEWS RELEASE FOR IMMEDIATE RELEASE For Further Information Contact : Charles D. Knight Executive Vice President Chief Financial Officer Investor Relations@catocorp.com EXHIBIT 99.1 CATO REPORTS 2Q EARNINGS CHARLOTTE , N.C. ( August 20 , 2026 ) - The Cato Corporation ( NYSE : CATO ) today reported net income of $ 1.1 million or $ 0.06 per diluted share for the second quarter ended August 1 , 2026 , compared to net income of $ 6.8 million or $ 0.35 per diluted share for the second quarter ended August 2 , 2025 . Sales for the second quarter ended August 1 , 2026 were $ 163.9 million , or a decrease of 6 % from sales of $ 174.7 million for the second quarter ended August 2 , 2025 primarily due to a 3.7 % same - store sales decrease for the quarter compared to 2025 . For the six months ended August 1 , 2026 , the Company reported net income of $ 10.5 million or $ 0.53 per diluted share , compared to net income of $ 10.1 million or $ 0.51 for the six months ended August 2 , 2025. Sales for the six months ended August 1 , 2026 were $ 333.3 million , a decrease of 2.9 % from sales of $ 343.1 million for the six months ended August 2 , 2025 primarily due to flat same - store sales compared to 2025 and the impact of closed stores . " Our results in the quarter are in large part due to the 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 , ” stated John Cato , Chairman , President , and Chief Executive Officer . " We expect the negative pressure on our customers ' discretionary income to continue for the foreseeable future . We will continue to tightly manage our expenses and inventory as we anticipate the back half of 2026 to be challenging . ” Gross margin decreased from 36.2 % to 32.8 % of sales in the quarter due to lower merchandise margins and deleveraging of occupancy costs . SG & A expenses as a percent of sales increased from 32.8 % to 33.0 % of sales during the quarter . For the quarter , SG & A expense decreased $ 3.3 million primarily due to lower payroll costs and credit card fees . Income tax expense for the quarter was $ 0.1 million versus an income tax benefit of $ 0.3 million in the prior year . Year - to - date gross margin decreased from 35.6 % of sales to 35.0 % primarily due to lower merchandise margins and deleveraging of occupancy costs . Year - to - date SG & A expenses were 32.4 % as a percent of sales versus 32.8 % in the prior year . Year - to - date SG & A expenses decreased $ 4.7 million primarily due to lower payroll , equipment and insurance costs , partially offset by professional fees and litigation costs . Income tax expense for the first half increased to $ 0.7 million from $ 0.6 million last year . During the second quarter ended August 1 , 2026 , the Company closed eight stores . As of August 1 , 2026 , the Company had 1,057 stores in 31 states , compared to 1,101 stores in 31 states as of August 2 , 2025 .