The Cato Corporation (CATO) 8-K CATO REPORTS 3Q EARNINGS Provides 4Q and Full Year 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
Provides 4Q and Full Year Guidance

Charlotte, NC (November 16, 2004) – The Cato Corporation (NYSE: CTR) today reported net income of $1.9 million or $0.09 per diluted share for the third quarter ended October 30, 2004, compared to net income of $.8 million or $0.04 per diluted share for the third quarter ended November 1, 2003, a net income increase of 132% and an earnings per diluted share increase of 125%. Sales for the third quarter were $163.6 million, an increase of 7% from sales of $153.2 million last year. Comparable store sales for the quarter increased 2%.

For the nine months ended October 30, 2004, the Company earned net income of $26.8 million compared to net income of $26.0 million for the nine months ended November 1, 2003, a 3% increase. Earnings per diluted share were $1.28 compared to $1.06 last year, a 21% increase. Sales were $565.9 million for the first nine months of 2004, a 5% increase from sales of $538.7 million last year. The Company’s year-to-date comparable store sales decreased 1%.

The Company’s 2003 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 retirement agreements with the Company’s

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

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founders.

For the quarter, the gross margin rate increased to 29.4% versus 29.1% last year. The SG&A rate decreased to 27.2% from 27.9% last year primarily due to the charge for the retirement agreements in 2003.

“Our third quarter comp store sale increase of 2% enabled us to deliver earnings per share of $.09, the high end of our estimated range,” commented John Cato, Chairman, President, and Chief Executive Officer. “We expect fourth quarter earnings per diluted share to be in the range of $.27 to $.31 versus $.26 last year. This estimate is based on comparable store sales in the range of down 2% to up 2%. For the year, earnings per diluted share are estimated to be in the range of $1.55 to $1.59 versus $1.33 last year.”

During the third quarter, the Company opened 20 new stores. Year-to-date the Company has opened 50 new stores, relocated 24 stores, and closed three stores. As of October 30, 2004, the Company operated 1,149 stores in 29 states, compared to 1,082 stores in 28 states of November 1, 2003.

In the fourth quarter, the Company plans to open 30 stores, which would bring the total number of new stores opened for the year to 80, in line with the Company’s estimate.

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.

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

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

6

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

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THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED OCTOBER 30, 2004 AND NOVEMBER 1, 2003
(Dollars in thousands, except per share data)

	Quarter Ended												Nine Months Ended
	October 30,			%			November 1,			%			October 30,			%			November 1,			%
	2004			Sales			2003			Sales			2004			Sales			2003			Sales
REVENUES
Retail sales	$	163,612			100.0	%	$	153,171			100.0	%	$	565,873			100.0	%	$	538,693			100.0	%
Other income (principally finance, late fees and layaway charges)		3,902			2.4	%		3,958			2.6	%		11,727			2.0	%		11,639			2.2	%
Total revenues		167,514			102.4	%		157,129			102.6	%		577,600			102.0	%		550,332			102.2	%
GROSS MARGIN (Memo)		48,131			29.4	%		44,614			29.1	%		181,997			32.2	%		170,522			31.7	%
COSTS AND EXPENSES, NET
Cost of goods sold		115,481			70.6	%		108,557			70.9	%		383,876			67.8	%		368,171			68.3	%
Selling, general and administrative		44,481			27.2	%		42,809			27.9	%		137,692			24.3	%		130,819			24.3	%
Depreciation		5,140			3.1	%		4,713			3.1	%		15,210			2.7	%		13,726			2.6	%
Interest expense		183			0.1	%		136			0.1	%		512			0.1	%		140			0.0	%
Interest and other income		(675	)		-0.4	%		(337	)		-0.2	%		(1,838	)		-0.3	%		(3,356	)		-0.6	%
Cost and expenses, net		164,610			100.6	%		155,878			101.8	%		535,452			94.6	%		509,500			94.6	%
Income Before Income Taxes		2,904			1.8	%		1,251			0.8	%		42,148			7.4	%		40,832			7.6	%
Income Tax Expense		1,054			0.7	%		454			0.3	%		15,300			2.7	%		14,822			2.8	%
Net Income	$	1,850			1.1	%	$	797			0.5	%	$	26,848			4.7	%	$	26,010			4.8	%
Basic Earnings Per Share	$	0.09					$	0.04					$	1.31					$	1.08
Basic Weighted Average Shares		20,609,123						21,499,411						20,554,929						24,138,935
Diluted Earnings Per Share	$	0.09					$	0.04					$	1.28					$	1.06
Diluted Weighted Average Shares		20,967,336						21,924,133						20,917,982						24,548,377

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

	October 30,		November 1,		January 31,
	2004		2003		2004
	(Unaudited)		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	27,560	$	17,086	$	23,857
Short-term investments		63,323		40,036		47,545
Accounts receivable — net		49,404		51,178		52,714
Merchandise inventories		101,807		101,874		97,292
Other current assets		2,675		7,302		5,992
Total Current Assets		244,769		217,476		227,400
Property and Equipment — net		116,307		114,677		114,367
Other Assets		10,110		9,578		9,806
TOTAL	$	371,186	$	341,731	$	351,573
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities	$	119,987	$	112,169	$	114,492
Noncurrent Liabilities		21,361		17,125		21,470
Long Term Debt		17,000		23,000		21,500
Stockholders’ Equity		212,838		189,437		194,111
TOTAL	$	371,186	$	341,731	$	351,573

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