The CatoCATO +3.73%65 Gross Margin % is 37.85% as of Apr. 2026, which is 9% above its 10-year median of 34.68. GuruFocus rates CATO with a GF Score™ of 65/100 and a GF Value™ of $4.19 (Modestly Undervalued). The stock has 2 warning signs investors should review. Among 1,117 Retail - Cyclical companies, The Cato ranks worse than 53.36% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. The Cato's Gross Profit for the
three
months ended in Apr. 2026 was $64.8 Mil. The Cato's Revenue for the
three
months ended in Apr. 2026 was $171.1 Mil. Therefore, The Cato's Gross Margin % for the quarter that ended in Apr. 2026 was 37.85%.
The historical rank and industry rank for The Cato's Gross Margin % or its related term are showing as below:
CATO'
s Gross Margin % Range Over the Past 10 Years
Min: 24.68 Med: 34.68 Max: 41.1
Current: 34.54
During the past 13 years, the highestGross Margin % of The Cato was 41.10%. The lowest was 24.68%. And the median was 34.68%.
CATO's Gross Margin % is ranked worse than 53.36% of 1117
companies
in the Retail - Cyclical industry
Industry Median: 36.23
vs CATO: 34.54
The Cato had a gross margin of 37.85% for the quarter that ended in Apr. 2026 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for The Cato was 2.80% per year.
The Cato (NYSE:CATO) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
The Cato had a gross margin of 37.85% for the quarter that ended in Apr. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
The Cato Gross Margin % Related Terms
The Cato Gross Margin % Historical Data
* Premium members only.
The historical data trend for The Cato's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
CATO vs DXLG, BRIA, BIRD: Gross Margin % Comparison
For the Apparel Retail subindustry, The Cato's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The Cato Gross Margin % vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, The Cato's Gross Margin % distribution charts can be found below:
* The bar in red indicates where The Cato's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
The Cato (CATO) has a Gross Margin % of 37.85% as of Apr. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on The Cato and its competitors. This is near median its historical median of 34.68. Over the past decade, The Cato's Gross Margin % has ranged from 24.68 to 41.10. According to the industry distribution chart, The Cato ranks #596 out of 1117 companies in the Retail - Cyclical industry, placing it in the top 53.4%.
Is The Cato's Gross Margin % too high?
The Cato's current Gross Margin % of 37.85% is near median its 10-year median of 34.68. Over the past 10 years, this metric has ranged from a low of 24.68 to a high of 41.10. The Retail - Cyclical industry median Gross Margin % is 36.23. The Cato's value of 37.85% is 4.5% above this industry median. Based on the distribution chart, The Cato ranks #596 out of 1117 companies in the Retail - Cyclical industry, which is below the industry midpoint. Overall, The Cato has a GF Score™ of 65/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does The Cato's Gross Margin % compare to DXLG and BRIA?
According to the Retail - Cyclical industry distribution chart, The Cato ranks #596 out of 1117 companies for Gross Margin %. This places The Cato in the lower half of its industry. The industry median Gross Margin % is 36.23. The Cato's value of 37.85% is 4.5% above this benchmark. Historically, The Cato's own Gross Margin % has ranged from 24.68 to 41.10 over the past decade. While the company's 10-year median is 34.68 vs. the industry median of 36.23, The Cato has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Retail - Cyclical company?
The median Gross Margin % among Retail - Cyclical companies is 36.23, based on 1,117 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The Cato's current Gross Margin % of 37.85% is 4.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on The Cato and its competitors. For the Retail - Cyclical industry, the median Gross Margin % is 36.23 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The Cato's current Gross Margin % is 37.85%, which is near median its own 10-year median of 34.68. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The Cato stock overvalued right now?
Based on GuruFocus' analysis, The Cato (CATO) is currently considered Modestly Undervalued. The stock's GF Value™ is $4.19, compared to a current price of $3.34 — trading 20.3% below its estimated fair value. The current Gross Margin % is 37.85%, which is near median its 10-year median of 34.68 and 4.5% above the Retail - Cyclical industry median of 36.23. The Cato's overall GF Score™ is 65/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For The Cato (CATO), the current Gross Margin % is 37.85% as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The Cato (CATO) Overvalued in 2026?
Based on GuruFocus' analysis, The Cato stock appears to be undervalued.
The current stock price of $3.34 is trading 20.3% below its estimated GF Value™ of $4.19.
GuruFocus considers The Cato to be Modestly Undervalued.
Key valuation signals for CATO:
Gross Margin %: 37.85% (near median its 10-year median of 34.68)
GF Value™: $4.19 vs. price of $3.34 (20.3% below fair value)
Industry Position: 4.5% above the Retail - Cyclical median (#596 of 1117)
No single metric tells the full story. See the CATO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
The Cato Corp seeks to offer quality fashion apparel and accessories at low prices every day, in junior/missy and plus sizes. The Cato concept's stores and e-commerce website feature a broad assortment of apparel and accessories, including dressy, career, and casual sportswear, dresses, coats, shoes, lingerie, costume jewelry, and handbags. Management believes the Company's success is dependent upon its ability to differentiate its stores from department stores, mass merchandise discount stores, and competing specialty stores. The key elements of the Company's business are: Merchandise Assortment, Value Pricing, Strip Shopping Center Location, Customer Service, Credit and Layaway Programs.
65GF Score
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