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Specialty apparel retailer Cato raises Q1 guidance

09
May '08

The Cato Corporation reported sales of $69.4 million for the four weeks ended May 3, 2008, an 8% increase over sales of $64.2 million for the four weeks ended May 5, 2007. Comparable store sales for the month increased 5%.

Sales for the first quarter ended May 3, 2008 were $225.8 million, a 1% increase over sales of $224.1 million for the first quarter ended May 5, 2007. Comparable store sales decreased 2% for the first quarter.

Because of the Easter shift, the best measure for year over year performance for March and April is the combined sales for the two months, which decreased 1% overall and decreased 3% on a comparable store basis.

"Combined March and April sales benefited from favorable weather comparisons to the prior year," said John Cato, Chairman, President, and Chief Executive Officer. "We now estimate first quarter earnings per diluted share will be in the range of $0.58 to $0.61 versus $0.59 last year.

Our earnings estimate for the quarter reflects the benefit of reduced markdowns. We continue to expect our business to be difficult for the foreseeable future with comparable store sales in the range of flat to down 3%. We remain comfortable with our previous guidance for the remainder of the year."

During the month of April, the Company opened nine new stores and closed three stores. New stores opened in Chipley, FL, LaGrange, GA, Belleville, IL, Baker and Port Allen, LA, Southhaven, MS, Mount Olive, NC, and Bay Cityand Houston, TX. As of May 3, 2008, the Company operated 1,326 stores in 32 states, compared to 1,286 stores in 31 states as of May 5, 2007.

Cato Corporation

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