CATO CORPCATO

CATO CORP Leases Disclosure

10-KFiled Mar 25, 20262 min read
11.
Leases:
The Company determines whether an
arrangement is a lease
at inception. The Company has
operating
leases for
stores,
offices,
warehouse space
and equipment.
Its
leases
have remaining
lease terms
of
one
year
to
10 years
, some of which include options to
extend the lease term for
up to five years
, and some of
which
include
options
to
terminate
the
lease
within one year
.
The
Company
considers
these
options
in
determining
the
lease term
used
to
establish its
right-of-use assets
and lease
liabilities. The
Company’s
lease agreements do not contain any material residual value guarantees or material
restrictive covenants.
As
most
of
the
Company’s
leases
do
not
provide
an
implicit
rate,
the
Company
uses
its
estimated
incremental
borrowing
rate
based
on
the
information
available
at
commencement
date
of
the
lease
in
determining the present value of lease payments.
The components of lease cost are shown below (in thousands):
`
Fiscal Year Ended
January 31, 2026
February 1, 2025
February 3, 2024
Operating lease cost (a)
$
65,866
$
67,174
$
70,363
Variable
lease cost (b)
$
2,490
$
2,275
$
2,646
(a) Includes right-of-use asset amortization of ($
0.2
) million, ($
0.8
) million, and ($
1.3
) million for the twelve months ended
January 31, 2026, February 1, 2025, and February 3, 2024 respectively.
(b) Primarily relates to monthly percentage rent for stores not presented on the balance sheet.
Supplemental cash flow
information and
non-cash activity
related to
the Company’s
operating leases
are as follows (in thousands):
Operating cash flow information:
Fiscal Year Ended
January 31, 2026
February 1, 2025
February 3, 2024
Cash paid for amounts included in the measurement of
lease liabilities
$
57,518
$
60,717
$
65,872
Non-cash activity:
Right-of-use assets obtained in exchange for lease
obligations, net of rent violations
$
61,989
$
53,419
$
44,284
Weighted-average
remaining lease
term and
discount rate
for the
Company’s
operating leases
are as
follows:
`
As of
January 31, 2026
February 1, 2025
Weighted-average remaining lease term
2.4
years
2.3
years
Weighted-average discount rate
6.27%
4.83%
Maturities
of
lease
liabilities
by
fiscal
year
for
the
Company’s
operating
leases
are
as
follows
(in
thousands):
Fiscal Year
2026
$
63,976
2027
45,395
2028
31,084
2029
19,210
2030
10,229
Thereafter
1,333
Total lease payments
171,227
Less: Imputed interest
20,779
Present value of lease liabilities
$
150,448

Historical Timeline

Fiscal YearFiled
2026Mar 25, 2026Showing above
2025Mar 31, 2025
2024Mar 27, 2024
2023Mar 23, 2023
2022Mar 23, 2022
2021Mar 29, 2021
2020Mar 27, 2020
2019Mar 27, 2019
2018Mar 27, 2018
2017Mar 23, 2017
2016Mar 24, 2016

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

Income TaxesRevenueFair ValuePP&ESegmentsCommitmentsNew Standards