The CatoCATO -0.93%65 Operating Margin % is 5.03% as of Apr. 2026, which is 948% above its 10-year median of 0.48. 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 1,128 Retail - Cyclical companies, The Cato ranks worse than 78.99% on this metric.
Operating Margin % is calculated as Operating Income divided by its Revenue. The Cato's Operating Income for the
three
months ended in Apr. 2026 was $8.6 Mil. The Cato's Revenue for the
three
months ended in Apr. 2026 was $171.1 Mil. Therefore, The Cato's Operating Margin % for the quarter that ended in Apr. 2026 was 5.03%.
The historical rank and industry rank for The Cato's Operating Margin % or its related term are showing as below:
CATO'
s Operating Margin % Range Over the Past 10 Years
Min: -13.78 Med: 0.48 Max: 4.8
Current: -1.3
CATO's Operating Margin % is ranked worse than 78.99% of 1128
companies
in the Retail - Cyclical industry
Industry Median: 3.905
vs CATO: -1.30
The Cato's 5-Year Average Operating Margin % Growth Rate was 0.00% per year.
The Cato's Operating Income for the
three
months ended in Apr. 2026 was $8.6 Mil.
Its Operating Income for the trailing twelve months (TTM) ended in Apr. 2026 was $-8.5 Mil.
The Cato (NYSE:CATO) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
The Cato Operating Margin % Related Terms
The Cato Operating Margin % Historical Data
* Premium members only.
The historical data trend for The Cato's Operating 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: Operating Margin % Comparison
For the Apparel Retail subindustry, The Cato's Operating Margin %, along with its competitors' market caps and Operating 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 Operating Margin % vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, The Cato's Operating Margin % distribution charts can be found below:
* The bar in red indicates where The Cato's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
The Cato's Operating Margin % for the fiscal year that ended in Jan. 2026 is calculated as
* 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.
The Cato (CATO) has a Operating Margin % of 5.03% as of Apr. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on The Cato and its competitors. This is 948% above median its historical median of 0.48. According to the industry distribution chart, The Cato ranks #891 out of 1128 companies in the Retail - Cyclical industry, placing it in the top 79%.
Is The Cato's Operating Margin % too high?
The Cato's current Operating Margin % of 5.03% is 948% above median its 10-year median of 0.48. The Retail - Cyclical industry median Operating Margin % is 3.91. The Cato's value of 5.03% is 28.8% above this industry median. Based on the distribution chart, The Cato ranks #891 out of 1128 companies in the Retail - Cyclical industry, which is in the bottom quartile relative to peers. 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 Operating Margin % compare to DXLG and BRIA?
According to the Retail - Cyclical industry distribution chart, The Cato ranks #891 out of 1128 companies for Operating Margin %. This places The Cato in the lower half of its industry. The industry median Operating Margin % is 3.91. The Cato's value of 5.03% is 28.8% above this benchmark. While the company's 10-year median is 0.48 vs. the industry median of 3.91, 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 Operating Margin % for a Retail - Cyclical company?
The median Operating Margin % among Retail - Cyclical companies is 3.91, based on 1,128 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The Cato's current Operating Margin % of 5.03% is 28.8% 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on The Cato and its competitors. For the Retail - Cyclical industry, the median Operating Margin % is 3.91 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The Cato's current Operating Margin % is 5.03%, which is 948% above median its own 10-year median of 0.48. 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 $3.20 — trading 23.6% below its estimated fair value. The current Operating Margin % is 5.03%, which is 948% above median its 10-year median of 0.48 and 28.8% above the Retail - Cyclical industry median of 3.91. 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 Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For The Cato (CATO), the current Operating Margin % is 5.03% 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 $3.20 is trading 23.6% below its estimated GF Value™ of $4.19.
GuruFocus considers The Cato to be Modestly Undervalued.
Key valuation signals for CATO:
Operating Margin %: 5.03% (948% above median its 10-year median of 0.48)
GF Value™: $4.19 vs. price of $3.20 (23.6% below fair value)
Industry Position: 28.8% above the Retail - Cyclical median (#891 of 1128)
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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