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

Exhibit 99.1

The CATO Corporation

NEWS RELEASE

FOR IMMEDIATE RELEASE

CEO Approval ________

For Further Information Contact:

Thomas W. Stoltz
Executive Vice President
Chief Financial Officer
704-551-7201

CATO REPORTS 3Q EARNINGS
Revises 4Q and Full Year Guidance

Charlotte, NC (November 29, 2007) — The Cato Corporation (NYSE: CTR) today reported net income of $2.9 million for the third quarter ended November 3, 2007, compared to net income of $5.9 million for the third quarter ended October 28, 2006, a decrease of 51%. Earnings per diluted share for the third quarter were $0.09, compared to $0.18 last year, a decrease of 50%. Sales for the third quarter were $181.9 million, a 3% decrease from sales of $187.7 million last year. Comparable store sales for the quarter decreased 5%.

For the nine months ended November 3, 2007, the Company earned net income of $34.1 million compared to net income of $38.8 million for the nine months ended October 28, 2006, a decrease of 12%. Earnings per diluted share were $1.07 compared to $1.22 last year, a decrease of 12%. Sales were $625.0 million for the first nine months of 2006, a 1% decrease from sales of $632.1 million last year. Year-to-date comparable store sales decreased 3%.

For the quarter, the gross margin rate decreased to 30.7% versus 32.2% last year. The decrease is primarily due to lower than planned sales resulting in higher markdowns. The SG&A rate increased to 28.2% from 27.4% last year primarily due to the deleveraging of expenses on the lower sales base.

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

5

“Third quarter results reflect the difficult retail environment we continue to face,” commented John Cato, Chairman, President, and Chief Executive Officer. “Due to lower sales and additional markdowns, we expect fourth quarter results will be in the range of a loss of ($0.08) to $0.00 per diluted share versus $0.40 last year. This estimate is based on comparable store sales in the range of down 7% to down 4% for the quarter. For the year, earnings per diluted share are estimated to be in the range of $0.99 to $1.07 versus $1.62 last year.”

Fourth quarter 2006 included 14 weeks compared to 13 weeks this year and several positive one-time adjustments totaling $0.10 earnings per diluted share as noted in prior releases.

Year-to-date, the Company has opened 49 new stores, relocated 16 stores, and closed four stores. As of November 3, 2007, the Company operated 1,321 stores in 31 states, compared to 1,270 stores in 31 states as of October 28, 2006. The Company still expects to open 60 to 65 stores for the year.

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 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 or estimated financial results for the third quarter, fourth quarter and full year and any related assumptions, as well as the Company’s expected plans for full year 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 and other factors discussed under “Risk Factors” in Part I, Item 1A of the Company’s most recently filed annual report onForm 10-K, as amended or supplemented, and in other reports the Company files with or furnishes to the SEC from time to time. 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

6

THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED NOVEMBER 3, 2007 AND OCTOBER 28, 2006
(Dollars in thousands, except per share data)

	Quarter Ended												Nine Months Ended
	November 3,			%			October 28,			%			November 3,			%			October 28,			%
	2007			Sales			2006			Sales			2007			Sales			2006			Sales
REVENUES
Retail sales	$	181,870			100.0	%	$	187,727			100.0	%	$	624,977			100.0	%	$	632,101			100.0	%
Other income (principally finance, late fees and layaway charges)		2,968			1.6	%		3,155			1.7	%		9,024			1.4	%		9,686			1.5	%
Total revenues		184,838			101.6	%		190,882			101.7	%		634,001			101.4	%		641,787			101.5	%
GROSS MARGIN (Memo)		55,790			30.7	%		60,498			32.2	%		207,962			33.3	%		219,014			34.7	%
COSTS AND EXPENSES, NET
Cost of goods sold		126,080			69.3	%		127,229			67.8	%		417,015			66.7	%		413,087			65.3	%
Selling, general and administrative		51,303			28.2	%		51,482			27.4	%		154,903			24.8	%		157,831			25.0	%
Depreciation		5,684			3.1	%		5,169			2.7	%		16,698			2.6	%		15,561			2.5	%
Interest and other income		(2,176	)		-1.2	%		(2,131	)		-1.1	%		(6,385	)		-1.0	%		(5,624	)		-0.9	%
Cost and expenses, net		180,891			99.4	%		181,749			96.8	%		582,231			93.1	%		580,855			91.9	%
Income Before Income Taxes		3,947			2.2	%		9,133			4.9	%		51,770			8.3	%		60,932			9.6	%
Income Tax Expense		1,011			0.6	%		3,272			1.8	%		17,654			2.8	%		22,179			3.5	%
Net Income	$	2,936			1.6	%	$	5,861			3.1	%	$	34,116			5.5	%	$	38,753			6.1	%
Basic Earnings Per Share	$	0.09					$	0.19					$	1.08					$	1.24
Basic Weighted Average Shares		31,891,308						31,298,253						31,713,755						31,270,347
Diluted Earnings Per Share	$	0.09					$	0.18					$	1.07					$	1.22
Diluted Weighted Average Shares		31,988,081						31,846,241						32,020,584						31,795,150

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

	November 3,		October 28,		February 3,
	2007		2006		2007
	(Unaudited)		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	20,187	$	21,428	$	24,833
Short-term investments		126,797		86,229		98,709
Accounts receivable — net		44,470		45,229		45,958
Merchandise inventories		114,066		110,078		115,918
Other current assets		14,623		10,900		14,095
Total Current Assets		320,143		273,864		299,513
Property and Equipment — net		125,377		130,255		128,461
Other Assets		4,617		11,150		4,348
TOTAL	$	450,137	$	415,269	$	432,322
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities	$	126,955	$	115,190	$	123,049
Noncurrent Liabilities		32,083		32,448		32,480
Stockholders’ Equity		291,099		267,631		276,793
TOTAL	$	450,137	$	415,269	$	432,322

7