Liquidity is constrained by inconsistent cash generation, highlighted by a $9.4 million working capital outflow in 2025Q3 and a decline in cash reserves to $28.1 million as of 2026Q1.
The Cato Corporation (CATO) cash flow statement — 30-year operating, investing & financing cash flows
| Metric | TTM | Jan'26 | Jan'25 | Jan'24 | Jan'23 | Jan'22 | Jan'21 | Jan'20 | Jan'19 | Jan'18 | Jan'17 | Jan'16 | Jan'15 | Jan'14 | Jan'13 | Jan'12 | Jan'11 | Jan'10 | Jan'09 | Jan'08 | Jan'07 | Jan'06 | Jan'05 | Jan'04 | Jan'03 | Jan'02 | Jan'01 | Jan'00 | Jan'99 | Jan'98 | Jan'97 |
|---|
| Cash from Operations | 5.44M | -1.46M | -19.75M | 477K | 13.37M | 59.79M | -30.71M | 53.4M | 60.24M | 35.99M | 72.13M | 93.85M | 117.46M | 92.96M | 80.35M | 81.34M | 79.48M | 84.69M | 71.57M | 74.16M | 58.7M | 70.94M | 79.85M | 65.75M | 63.73M | 47.06M | 44.09M | 44.52M | 40.9M | 38.9M | 15.6M |
| Operating CF Margin % | - | -0.22% | -3.04% | 0.07% | 1.76% | 7.77% | -5.34% | 6.47% | 7.26% | 4.23% | 7.54% | 9.28% | 11.9% | 10.1% | 8.51% | 8.73% | 8.59% | 9.58% | 8.34% | 8.76% | 6.7% | 8.48% | 10.11% | 8.8% | 8.52% | 6.86% | 6.8% | 7.61% | 7.8% | 7.83% | 3.27% |
| Operating CF Growth % | 202.45% | 92.6% | -4239.41% | -96.43% | -77.64% | 294.69% | -157.51% | -11.37% | 67.4% | -50.11% | -23.15% | -20.1% | 26.36% | 15.69% | -1.22% | 2.35% | -6.16% | 18.34% | -3.5% | 26.34% | -17.26% | -11.16% | 21.45% | 3.17% | 35.43% | 6.72% | -0.96% | 8.85% | 5.14% | 149.36% | 4.7% |
| Net Income | -5.59M | -5.91M | -18.06M | -23.94M | 29K | 36.84M | -47.48M | 35.9M | 30.46M | 8.54M | 47.21M | 66.84M | 60.5M | 54.32M | 61.67M | 64.83M | 57.74M | 45.77M | 33.63M | 32.32M | 51.45M | 44.83M | 34.84M | 31.39M | 45.83M | 43.09M | 39.03M | 33.78M | 23.9M | 17.4M | 7M |
| Depreciation & Amortization | 9.38M | 9.99M | 9.82M | 9.87M | 11.08M | 12.36M | 14.68M | 15.48M | 16.46M | 19.64M | 22.72M | 22.96M | 22.03M | 21.82M | 22.45M | 21.82M | 21.82M | 21.83M | 22.57M | 22.21M | 20.94M | 20.27M | 20.4M | 18.7M | 14.98M | 11.05M | 9.62M | 8.83M | 7.8M | 7.8M | 8.5M |
| Stock-Based Compensation | 1.66M | 1.67M | 2.28M | 4.17M | 2.61M | 4.09M | 4.09M | 4.67M | 4.94M | 4.2M | 4.2M | 4.12M | 3.58M | 3.01M | 2.8M | 2.56M | 2.34M | 2.06M | 2.21M | 1.69M | 1.33M | 682K | 682K | 782K | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 | 8.72M | 386K | -3.19M | 3.03M | 2.12M | 1.28M | 1.18M | -2.88M | -2.63M | -1.56M | -4.77M | -5.54M | -1.94M | 4.53M | 113K | 1.18M | -6.36M | 574K | -3.66M | -817K | 5M | 70K | 422K | 1.6M | 175K | 0 | 500K | -800K |
| Other Non-Cash Items | 239K | -555K | -4.84M | 1.75M | 1.9M | 1.63M | 11.48M | 1.14M | 3.68M | 14.35M | 17.28M | -507K | 4.07M | 4.36M | 4.51M | 2.05M | 3.09M | 5.07M | 7.56M | -1.96M | 3.94M | 6.41M | 6.65M | 6.9M | 8.18M | 6.69M | 6.84M | 5.92M | 5.1M | -100K | 400K |
| Working Capital Changes | -253K | -6.66M | -8.95M | -93K | -2.63M | 8.06M | -16.51M | -5.91M | 3.41M | -11.91M | -16.39M | 3.07M | 28.85M | 14.21M | -5.54M | -7.98M | -10.05M | 9.85M | 4.42M | 26.25M | -19.53M | 2.41M | 18.1M | 2.98M | -5.34M | -14.19M | -13M | -4.18M | 4.1M | 8.4M | 500K |
| Change in Receivables | 4.5M | -1.41M | 1.36M | -608K | 29.03M | -3.5M | -26.93M | 1.52M | -579K | 1.78M | 5.44M | 3.54M | -2.67M | -217K | 1.75M | -5.04M | -2.38M | 339K | -2.68M | -2.17M | 1.05M | -3.4M | -3.27M | -4.7M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 14.79M | 27.04M | -12.14M | 13.45M | 12.85M | -40.78M | 31.24M | 4.22M | 1.95M | 24.15M | -4.58M | -3.55M | 13.31M | -10.12M | -10.36M | 13.65M | -13.39M | -6.34M | 6.39M | -2.76M | -12.55M | -2.83M | -3.25M | -3.83M | -13.05M | -1.25M | -9.66M | -8.38M | 3.1M | -300K | -5.5M |
| Change in Payables | -17.95M | -30.54M | 3.46M | -10.05M | -43.18M | 57.83M | -16.95M | -8.63M | -7.66M | -28.78M | -8.25M | 233K | 24.64M | 20.93M | 9.1M | 0 | 0 | 15.14M | -3.78M | 24.02M | -11.78M | 9.18M | 21.25M | 11.42M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -4.28M | -1.3M | 28.96M | 19.78M | 16.02M | -25.33M | 64.51M | -22.63M | -71.14M | 66.86M | -14.65M | -81.77M | -27.69M | -32.93M | 2.13M | -59.69M | -55.66M | -58.12M | -29.29M | -12.13M | -40.02M | -26M | -66.33M | 6.57M | -61.5M | -10.37M | -26.97M | -42.01M | -27.4M | -1.8M | -20.5M |
| Capital Expenditures | -3.81M | -3.76M | -7.87M | -12.53M | -19.43M | -4.11M | -13.96M | -8.31M | -4.35M | -11.1M | -27.3M | -26.53M | -28.9M | -31.54M | -45.17M | -35.89M | -19.56M | -9.96M | -19.44M | -18.33M | -27.55M | -28.51M | -25.3M | -20.55M | -28.95M | -25.68M | -27.23M | -23.96M | -13.5M | -7.4M | -8.4M |
| CapEx % of Revenue | 0.59% | 0.58% | 1.21% | 1.77% | 2.56% | 0.53% | 2.43% | 1.01% | 0.52% | 1.31% | 2.85% | 2.62% | 2.93% | 3.43% | 4.79% | 3.85% | 2.11% | 1.13% | 2.27% | 2.17% | 3.15% | 3.41% | 3.2% | 2.75% | 3.87% | 3.75% | 4.2% | 4.1% | 2.57% | 1.49% | 1.76% |
| Acquisitions | 0 | 0 | 0 | 0 | -35.46M | 0 | 13.96M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 19.44M | 18.33M | 27.55M | 28.51M | 25.3M | 20.55M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 1.57M | 867K | 13.67M | -8K | 35.46M | -400K | -10.75M | -1.36M | -291K | -682K | 492K | -5.2M | 2.18M | 1.3M | -674K | -499K | -2.25M | 6.51M | -19.44M | -18.33M | -27.55M | -28.51M | -25.3M | -20.55M | 0 | 0 | 0 | 0 | 0 | 100K | 0 |
| Cash from Financing | -267K | -851K | -14.05M | -16.13M | -29.28M | -31.8M | -27.18M | -41.57M | -45.16M | -72.03M | -77.31M | -38.98M | -75.25M | -11.67M | -86.31M | -35.39M | -25.57M | -18.45M | -21.6M | -65.28M | -15.58M | -41.85M | -18.74M | -80.53M | -11.94M | -20.12M | -22.31M | -16.19M | -11M | -12.1M | -4.7M |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -500K | 0 | 0 | -22M | -5.5M | 27.5M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Equity Issued (Net) | -267K | -851K | -3.88M | -2.56M | -15.22M | -22.03M | -19.65M | -9.61M | -13.34M | -38.88M | -42.56M | -6.15M | -42.13M | -6.43M | -367K | -10.62M | -5.86M | 363K | -2M | -49.97M | 1.38M | -880K | 3.7M | -93.56M | 2.95M | -6.72M | -11.68M | -9.22M | -5.8M | -7.6M | -200K |
| Dividends Paid | 0 | 0 | -10.52M | -13.95M | -14.37M | -9.97M | -7.91M | -32.59M | -32.58M | -33.73M | -35.43M | -33.57M | -33.89M | -5.85M | -87.22M | -25.71M | -21.22M | -19.48M | -19.39M | -20.28M | -18.23M | -15.87M | -14.13M | -14.46M | -14.89M | -13.4M | -10.63M | -7.42M | -5.2M | -4.5M | -4.6M |
| Share Repurchases | -422K | -995K | -3.88M | -2.56M | -15.22M | -22.03M | -19.65M | -9.61M | -13.34M | -38.88M | -42.56M | -6.15M | -42.13M | -6.43M | -367K | -10.62M | -5.86M | -49K | -2.44M | -58.56M | 0 | -3.54M | 0 | -98.3M | -1.19M | -11.73M | -15.45M | -9.57M | -10.1M | -8.2M | -800K |
| Other Financing | 0 | 0 | 338K | 384K | 307K | 204K | 391K | 626K | 759K | 579K | 691K | 745K | 764K | 614K | 1.28M | 950K | 1.51M | 668K | 290K | 4.96M | 1.27M | -3.1M | -2.8M | 0 | 0 | 0 | 0 | 447K | 0 | 0 | 100K |
| Net Change in Cash | 890K | -3.62M | -4.83M | 4.12M | 115K | 2.65M | 6.62M | -10.81M | -56.05M | 30.81M | -19.82M | -26.89M | 14.52M | 48.36M | -3.82M | -13.74M | -1.75M | 8.12M | 20.68M | -3.25M | 3.1M | 3.09M | -5.22M | -8.21M | -9.71M | 16.57M | -5.19M | -13.68M | -11M | -12.1M | -4.7M |
| Free Cash Flow | 1.63M | -5.22M | -27.62M | -12.05M | -6.06M | 55.68M | -44.67M | 45.09M | 55.89M | 24.89M | 44.83M | 67.32M | 88.56M | 61.42M | 35.18M | 45.45M | 59.92M | 74.73M | 52.12M | 55.83M | 31.15M | 42.43M | 54.55M | 45.19M | 34.78M | 21.37M | 16.86M | 20.56M | 27.4M | 31.5M | 7.2M |
| FCF Margin % | 0.25% | -0.8% | -4.25% | -1.7% | -0.8% | 7.24% | -7.77% | 5.46% | 6.74% | 2.93% | 4.69% | 6.66% | 8.97% | 6.68% | 3.73% | 4.88% | 6.47% | 8.45% | 6.08% | 6.6% | 3.56% | 5.07% | 6.91% | 6.05% | 4.65% | 3.12% | 2.6% | 3.51% | 5.22% | 6.34% | 1.51% |
| FCF Growth % | 108.84% | 81.08% | -129.09% | -98.83% | -110.89% | 224.67% | -199.06% | -19.32% | 124.53% | -44.48% | -33.4% | -23.98% | 44.19% | 74.6% | -22.61% | -24.14% | -19.82% | 43.37% | -6.64% | 79.22% | -26.58% | -22.22% | 20.7% | 29.96% | 62.71% | 26.74% | -17.97% | -24.97% | -13.02% | 337.5% | 30.91% |
| FCF per Share | 0.08 | -0.27 | -1.43 | -0.62 | -0.30 | 2.64 | -1.98 | 1.90 | 2.26 | 0.99 | 1.63 | 2.41 | 3.15 | 2.10 | 1.20 | 1.55 | 2.07 | 2.53 | 1.79 | 1.77 | 0.98 | 1.33 | 1.74 | 1.28 | 0.89 | 0.55 | 0.44 | 0.51 | 0.65 | 0.75 | 0.17 |
| FCF Conversion (FCF/Net Income) | -0.29x | 0.25x | 1.06x | -0.02x | 326.10x | 1.71x | 0.68x | 1.54x | 2.04x | 4.30x | 1.56x | 1.43x | 1.98x | 1.74x | 1.32x | 1.27x | 1.40x | 1.85x | 2.13x | 2.29x | 1.14x | 1.58x | 2.29x | 2.09x | 1.39x | 1.09x | 1.13x | 1.31x | 1.71x | 2.24x | 2.23x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 918K | 1.87M | 4.12M | 0 | 13.18M | 6.83M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Quick answers to the most common questions about buying CATO stock.
The Cato Corporation (CATO) generated $-1.5M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
The Cato Corporation (CATO) reported negative free cash flow of $5.2M in 2025, indicating capital requirements exceeded cash from operations.
The Cato Corporation (CATO) spent $3.8M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, The Cato Corporation (CATO) spent $1.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Persistent negative operating cash
Metrics are mathematically derived from official filings.
Earnings Quality and Cash Disconnect
According to recent financial statements, CATO exhibits a volatile relationship between net income and operating cash flow, with the OCF/NI ratio fluctuating wildly from 0.43 to 30.10, suggesting that reported earnings are frequently decoupled from the actual cash-generating capacity of the underlying retail operations.
The extreme variance in the OCF/NI ratio indicates that accruals and working capital swings are masking the true cash-generative nature of the business. Investors should monitor this divergence, as it suggests that net income is an unreliable proxy for the company's ability to fund its ongoing operations.
Free Cash Flow Margin Volatility
As reported in quarterly filings, CATO's free cash flow trajectory remains highly inconsistent, swinging from a positive 5.9% margin in 2025Q2 to a deeply negative 16.3% in 2024Q3, highlighting the company's inability to maintain a stable cash-generative baseline amidst stagnant top-line performance.
The erratic FCF margins suggest that the company is struggling to manage its cash burn during seasonal troughs. This instability may indicate that the current business model lacks the necessary operating leverage to remain cash-flow positive during periods of lower consumer demand.
Working Capital Efficiency Remains Strained
Based on the provided cash flow data, working capital changes have frequently acted as a significant drag on liquidity, with a notable $9.4 million outflow in 2025Q3, suggesting that inventory management and credit segment receivables are not being optimized to support consistent cash inflows.
The recurring negative impact of working capital changes implies that the company may be struggling with inventory bloat or delayed collections within its proprietary credit segment. This inefficiency forces the company to rely on its cash reserves to bridge the gap between operational cycles.
Capital Intensity Amidst Operational Decline
As evidenced by historical cash flow statements, CATO maintains a low capital intensity with CapEx/Revenue ratios generally below 1.5%, yet even this modest level of investment appears difficult to sustain given the persistent negative operating cash flows observed in several recent reporting periods.
While the company is not aggressively expanding its footprint, the inability to cover even maintenance-level CapEx from internal cash flow is a concerning signal. This suggests that the physical store network may be consuming more capital than it generates, warranting further investigation into the long-term viability of the current fleet.
Capital Allocation Under Financial Pressure
According to reported figures, CATO has historically prioritized dividends and share repurchases, but the recent shift to negative operating cash flow suggests that these capital allocation strategies may no longer be supported by the company's current operational performance and liquidity position.
The decision to continue returning capital to shareholders while the business is burning cash appears to be an unsustainable strategy that may erode the company's historically healthy balance sheet. Investors should monitor whether management will prioritize liquidity preservation over historical dividend commitments in future quarters.