$CATO to Close 120 Stores as Rivals $ROST, $TJX Gain Ground

Cato Corporation plans to close 120 stores, expanding its closure list by 70 locations, after Q2 2026 net income fell to $1.1 million from $6.8 million a year earlier and sales dropped 6% to $163.9 million, driven by a 3.7% same-store sales decline. CEO John Cato blamed "continued pressure on our customers' discretionary income" from inflation, higher fuel prices, and elevated interest rates, adding he expects the second half of 2026 to be "challenging."
By contrast, $ROST's Q2 fiscal 2026 sales rose 13% with comparable sales up 10%, driven by customer traffic, while $TJX's Marshalls and TJ Maxx posted a 1% same-store sales increase and 3% overall sales growth. Per Placer.ai data, visits to Ross Dress for Less rose 16.4% year-over-year in Q2 2026 and dd's DISCOUNTS grew 8.4%, while TJX brand visits held roughly flat — all outperforming traditional apparel, which fell 3.5%.
Morningstar analysts said $ROST's roughly 2,200 stores and 30% off-price market share give it scale advantages over smaller rivals like Cato, which operated more than 800 stores before the planned closures. The Cato store closures all involve expiring leases, removing that rent from the company's books by the end of 2026.