Specialty apparel retailer Cato boosts 1Q earnings guidance

CHARLOTTE, N.C.—Specialty apparel retailer Cato Corp. raised its first-quarter guidance Thursday after reporting that same-store sales rose 5 percent in April.

Cato now predicts first-quarter earnings of 58 to 61 cents per share, compared with 59 cents per share a year ago. The company previously expected first-quarter earnings of 49 to 55 cents per share.

Cato said its quarterly earnings estimate 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 percent. We remain comfortable with our previous guidance for the remainder of the year," said Chairman, President, and Chief Executive John Cato.

Cato previously forecast full-year 2008 earnings between $21 million and $27 million, or 72 to 93 cents per share.

Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance because it measures growth at existing stores rather than newly opened ones.

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