| Reportable Segment Information |
NOTE 5 – REPORTABLE SEGMENT INFORMATION: The Company has determined that it has four operating segments, as defined under ASC 280 – Segment Reporting (“ASC 280”), including Cato, It’s Fashion, Versona and Credit. The Company has two segments: Retail and Credit. The Company has aggregated its three retail operating segments, including e- commerce, based on the aggregation criteria outlined in ASC 280-10, which states that two or more operating segments may be aggregated into a single reportable segment if aggregation is consistent with the objective and basic principles of ASC 280-10, which require the segments to have similar economic characteristics, products, production processes, clients and methods of distribution. The Company’s retail operating segments have similar economic characteristics and similar operating, financial and competitive risks. The products sold in each retail operating segment are similar in nature, as they all offer women’s apparel, shoes and accessories. Merchandise inventory of the Company’s retail operating segments is sourced from the same countries and some of the same vendors, using similar production processes. Merchandise for the Company’s retail operating segments is distributed to retail stores in a similar manner through the Company’s single distribution center and is subsequently distributed to customers in a similar manner. The Company operates its women’s fashion specialty retail stores in 31 states as of May 2, 2026, principally in the southeastern United States. The Company offers its own credit card to its customers and all credit authorizations, payment processing and collection efforts are performed by a wholly-owned subsidiary of the Company. The Company does not allocate certain corporate expenses to the Credit segment. The Company’s President and Chief Executive Officer is the Company’s chief operating decision maker (“CODM”). The structure described above reflects the manner in which the CODM regularly assesses information for decision-making purposes, including the allocation of resources. The Company also provides corporate services, including finance, information technology, and corporate administration, to its segments which are fully allocated to the retail segment. Interest and other income from assets held for investment and sale are not included in assessing the segments’ performance and therefore not allocated to either segment. The CODM manages and evaluates the segments’ operating performance based on segment sales, expenses, and segment income before income taxes as presented in the Company’s annual budget and forecasting process, as well as monthly analyses of budget-to-actual and prior year variances. Segment expenses and other items primarily include cost of goods sold, selling, general and administrative expenses, depreciation and interest and other income. Assessment and approval of all capital expenditures are determined to be in support of and based on the needs of the retail segment; however, the CODM does not evaluate performance or allocate resources based on segment asset balances and, therefore, total segment assets are not presented in the tables below. The measure of segment assets is reported on the balance sheet as total consolidated assets. The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies in Note 1 of the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026. The following schedule summarizes certain segment information (in thousands):
Three Months Ended May 2, 2026 Retail Credit Total Revenues $ 170,439 $ 665 $ 171,104 Cost of goods sold (a) 106,340 - 106,340 Selling, general, and administrative (b) 38,717 397 39,114 Corporate overhead 14,816 - 14,816 Depreciation 2,236 - 2,236 Interest and other income, net (87) (270) (357) Segment income before income taxes $ 8,417 $ 538 $ 8,955 Corporate interest and other income (876) Income before income taxes $ 9,831 Capital expenditures $ 1,067 $ - $ 1,067 Three Months Ended May 3, 2025 Retail Credit Total Revenues $ 169,577 $ 665 $ 170,242 Cost of goods sold (a) 109,318 - 109,318 Selling, general, and administrative (b) 39,159 387 39,546 Corporate overhead 15,779 - 15,779 Depreciation 2,564 - 2,564 Interest and other income, net (105) (303) (408) Segment income before income taxes $ 2,862 $ 581 $ 3,443 Corporate interest and other income (794) Income before income taxes $ 4,237 Capital expenditures $ 1,019 $ - $ 1,019 (a) Cost of goods sold includes merchandise costs, net of discounts and allowances, buying costs, distribution costs, occupancy costs, freight, and inventory shrinkage. Net merchandise costs and in-bound freight are capitalized as inventory costs. Buying and distribution costs include payroll, payroll-related costs and operating expenses for the buying departments and distribution center. Occupancy costs include rent, real estate taxes, insurance, common area maintenance, utilities and maintenance for stores and (b) Selling, general, and administrative expense include corporate and store payroll, related payroll taxes and benefits, insurance, supplies, advertising, bank and credit card processing fees. |