The Cato Corporation (CATO) 8-K CATO REPORTS 3Q EARNINGS Reaffirms 4Q Guidance

Exhibit 99.1

The CATO Corporation

	NEWS RELEASE
FOR IMMEDIATE RELEASE
	CEO Approval ____________
For Further Information Contact:
Michael O. Moore
Executive Vice President
Chief Financial Officer
704-551-7201

CATO REPORTS 3Q EARNINGS
Reaffirms 4Q Guidance

Charlotte, N. C. (November 18, 2003) – The Cato Corporation (NYSE: CTR) today reported net income of $.8 million or $0.04 per diluted share for the third quarter ended November 1, 2003, compared to net income of $5.4 million or $0.21 per diluted share for the third quarter last year, a net income decrease of 85% and an earnings per diluted share decrease of 81%. Sales for the third quarter were $153.2 million, a decrease of 3% from sales of $158.2 million last year. Comparable store sales for the quarter decreased 10%.

For the nine months ended November 1, 2003, the Company earned net income of $26.0 million compared to net income of $36.0 million for the nine months ended November 2, 2002, a 28% decrease. Earnings per diluted share were $1.06 compared to $1.39 last year, a 24% decrease. Sales were $538.7 million for the first nine months of 2003, a 1% decrease from sales of $541.7 million last year. The Company’s year-to-date comparable store sales decreased 8%.

The Company’s third quarter and nine-month earnings reflect an after-tax charge of $1.8 million ($2.8 million pre-tax) or $.08 per diluted share for the third quarter and $.07 per diluted share for the nine months related to the previously announced retirement agreements with

8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510

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the Company’s founders.

For the quarter, the gross margin rate decreased to 29.1% versus 30.3% last year due to unfavorable leverage of occupancy and other costs on lower sales. The SG&A rate increased to 27.9% versus 25.6% last year due to the $2.8 million charge for the retirement agreements.

“We will continue to aggressively manage inventory levels and expenses during the fourth quarter”, commented John Cato, President, Vice Chairman, and Chief Executive Officer. “Our fourth quarter earnings per diluted share estimate is unchanged from our previous guidance of $.22 to $.30 versus $.38 last year. For the year, earnings per diluted share are estimated to be in the range of $1.28 to $1.36 versus $1.77 last year”.

During the quarter, the Company repurchased 5,137,484 shares of Class B common stock from the Company’s founders. Year-to-date, the Company has repurchased a total of 5,302,484 shares. The Company has remaining authorization to repurchase 1,162,050 additional shares.

During the third quarter, the Company opened 32 new stores. Year-to-date the Company has opened 61 new stores, relocated 18 stores, and closed one store. As of November 1, 2003, the Company operated 1,082 stores in 28 states, compared to 992 stores in 24 states as of November 2, 2002.

In the fourth quarter, the Company plans to open 26 stores, which would bring the total number of new stores opened for the year to 87, slightly below the Company’s original plan of 90 new stores.

The Cato Corporation is a leading specialty retailer of value-priced women’s fashion apparel operating two divisions, “Cato” and “It’s Fashion!”. The Company primarily offers exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices, every day. Additional information on The Cato Corporation is available atwww.catocorp.com.

8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510

6

Statements in this press release not historical in nature including, without limitation, statements regarding the Company’s expected financial results for the fourth quarter and year and expected plans for fourth quarter store openings are considered “forward-looking” within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the forward-looking statements. Such factors include, but are not limited to, the following: general economic conditions; competitive factors and pricing pressures; the Company’s ability to predict fashion trends; consumer apparel buying patterns; adverse weather conditions and inventory risks due to shifts in market demand. The Company does not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any changes made to this press release by wire or Internet services.

# # #

8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510

7

THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED NOVEMBER 1, 2003 AND NOVEMBER 2, 2002
(Dollars in thousands, except per share data)

			Quarter Ended												Nine Months Ended
			November 1,			%			November 2,			%			November 1,			%			November 2,			%
			2003			Sales			2002			Sales			2003			Sales			2002			Sales
REVENUES
	Retail sales		$	153,171			100.0	%	$	158,217			100.0	%	$	538,693			100.0	%	$	541,734			100.0	%
	Other income (principally finance, late fees and layaway charges)			3,958			2.6	%		4,011			2.6	%		11,639			2.2	%		11,700			2.2	%
		Total revenues		157,129			102.6	%		162,228			102.6	%		550,332			102.2	%		553,434			102.2	%
GROSS MARGIN (Memo)				44,614			29.1	%		48,029			30.3	%		170,522			31.7	%		181,232			33.4	%
COSTS AND EXPENSES, NET
	Cost of goods sold			108,557			70.9	%		110,188			69.7	%		368,171			68.3	%		360,502			66.6	%
	Selling, general and administrative			42,809			27.9	%		40,533			25.6	%		130,819			24.3	%		129,976			24.0	%
	Depreciation			4,713			3.1	%		4,143			2.6	%		13,726			2.6	%		10,505			1.9	%
	Interest and other income, net			(201	)		-0.1	%		(1,143	)		-0.7	%		(3,216	)		-0.6	%		(3,952	)		-0.7	%
		Cost and expenses, net		155,878			101.8	%		153,721			97.2	%		509,500			94.6	%		497,031			91.8	%
Income Before Income Taxes				1,251			0.8	%		8,507			5.4	%		40,832			7.6	%		56,403			10.4	%
Income Tax Expense				454			0.3	%		3,080			2.0	%		14,822			2.8	%		20,418			3.8	%
Net Income			$	797			0.5	%	$	5,427			3.4	%	$	26,010			4.8	%	$	35,985			6.6	%
Basic Earnings Per Share			$	0.04					$	0.21					$	1.08					$	1.41
Basic Weighted Average Shares				21,499,411						25,516,334						24,138,935						25,437,165
Diluted Earnings Per Share			$	0.04					$	0.21					$	1.06					$	1.39
Diluted Weighted Average Shares				21,924,133						25,892,537						24,548,377						25,935,649

THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

			November 1,		November 2,		February 1,
			2003		2002		2003
			(Unaudited)		(Unaudited)
ASSETS
Current Assets
	Cash and cash equivalents		$	17,086	$	49,528	$	32,065
	Short-term investments			40,036		54,627		74,871
	Accounts receivable — net			51,178		52,303		54,116
	Merchandise inventories			101,874		104,775		93,457
	Other current assets			7,302		6,089		6,382
Total Current Assets				217,476		267,322		260,891
Property and Equipment — net				114,677		111,351		113,307
Other Assets				9,578		9,144		9,212
		TOTAL	$	341,731	$	387,817	$	383,410
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities			$	112,169	$	113,835	$	98,282
Noncurrent Liabilities				17,125		13,589		14,964
Long Term Debt				23,000		0		0
Stockholders’ Equity				189,437		260,393		270,164
		TOTAL	$	341,731	$	387,817	$	383,410

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