10-Q

Table of Contents

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 3, 2013
OR
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________to__________________
Commission file number 1-31340

THE CATO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware	56-0484485
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8100 Denmark Road, Charlotte, North Carolina 28273-5975
(Address of principal executive offices) (Zip Code)
(704) 554-8510
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes X No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer  þ     Accelerated filer  ¨      Non-accelerated filer  ¨      Smaller reporting company ¨ 

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No X

As of August 3, 2013, there were 27,510,139 shares of Class A common stock and 1,743,525 shares of Class B common stock outstanding.

THE CATO CORPORATION

FORM 10-Q

Quarter Ended August 3, 2013

Table of Contents

				Page No.
PART I – FINANCIAL INFORMATION (UNAUDITED)
	Item 1.		Financial Statements (Unaudited):
	Condensed Consolidated Statements of Income and Comprehensive Income			2
		For the Three Months and Six Months Ended August 3, 2013 and July 28, 2012
	Condensed Consolidated Balance Sheets			3
		At August 3, 2013, February 2, 2013 and July 28, 2012
	Condensed Consolidated Statements of Cash Flows			4
		For the Six Months Ended August 3, 2013 and July 28, 2012
	Notes to Condensed Consolidated Financial Statements			5 – 18
		For the Three Months and Six Months Ended August 3, 2013 and July 28, 2012
	Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	19 – 26
	Item 3.		Quantitative and Qualitative Disclosures About Market Risk	27
	Item 4.		Controls and Procedures	27
PART II – OTHER INFORMATION
	Item 1.		Legal Proceedings	28
	Item 1A.		Risk Factors	28
	Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	28
	Item 3.		Defaults Upon Senior Securities	28
	Item 4.		Mine Safety Disclosures	29
	Item 5.		Other Information	29
	Item 6.		Exhibits	29
	Signatures			30 - 34

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PART I FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND

COMPREHENSIVE INCOME

(UNAUDITED)

		Three Months Ended			Six Months Ended
		August 3, 2013		July 28, 2012		August 3, 2013		July 28, 2012
		(Dollars in thousands, except per share data)
REVENUES
Retail sales	$	229,378	$	231,450	$	496,559	$	504,240
Other revenue (principally finance charges, late fees and
layaway charges)		2,340		2,613		4,857		5,167
Total revenues		231,718		234,063		501,416		509,407
COSTS AND EXPENSES, NET
Cost of goods sold (exclusive of depreciation shown below)		144,950		142,459		301,851		300,291
Selling, general and administrative (exclusive of depreciation
shown below)		58,965		59,220		118,354		120,575
Depreciation		5,436		5,742		10,885		11,513
Interest and other income		(730)		(985)		(1,605)		(1,891)
Cost and expenses, net		208,621		206,436		429,485		430,488
Income before income taxes		23,097		27,627		71,931		78,919
Income tax expense		8,322		10,294		26,317		29,864
Net income	$	14,775	$	17,333	$	45,614	$	49,055
Basic earnings per share	$	0.51	$	0.59	$	1.56	$	1.68
Diluted earnings per share	$	0.51	$	0.59	$	1.56	$	1.68
Dividends per share	$	0.05	$	0.25	$	0.10	$	0.48
Comprehensive income:
Net income	$	14,775	$	17,333	$	45,614	$	49,055
Unrealized gain (loss) on available-for-sale securities, net of
deferred income taxes of ($273) and ($206) for the three and six
months ended August 3, 2013 and $8 and $44 for the three
and six months ended July 28, 2012, respectively		(453)		13		(342)		73
Comprehensive income	$	14,322	$	17,346	$	45,272	$	49,128

See notes to condensed consolidated financial statements (unaudited).

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THE CATO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	August 3, 2013		February 2, 2013		July 28, 2012
	(Dollars in thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	88,559	$	31,069	$	66,043
Short-term investments		157,326		157,578		211,390
Restricted cash and investments		4,807		5,999		5,311
Accounts receivable, net of allowance for doubtful accounts of
$2,036, $2,053 and $2,042 at August 3, 2013, February 2, 2013
and July 28, 2012 respectively		39,908		40,016		43,373
Merchandise inventories		111,206		140,738		107,034
Deferred income taxes		4,837		4,631		3,535
Prepaid expenses		10,997		10,183		4,160
Total Current Assets		417,640		390,214		440,846
Property and equipment – net		139,550		134,227		125,520
Other assets		10,223		8,205		7,016
Total Assets	$	567,413	$	532,646	$	573,382
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	80,674	$	99,247	$	70,573
Accrued expenses		49,196		43,773		43,160
Accrued bonus and benefits		1,609		2,290		4,708
Accrued income taxes		22,523		14,292		19,555
Total Current Liabilities		154,002		159,602		137,996
Deferred income taxes		3,330		3,330		7,887
Other noncurrent liabilities (primarily deferred rent)		26,520		24,480		24,231
Commitments and contingencies:		-		-		-
Stockholders' Equity:
Preferred stock, $100 par value per share, 100,000 shares
authorized, none issued		-		-		-
Class A common stock, $.033 par value per share, 50,000,000
shares authorized; issued 27,510,139 shares, 27,543,376 shares
and 27,530,131 shares at August 3, 2013, February 2, 2013 and
July 28, 2012 respectively		917		918		918
Convertible Class B common stock, $.033 par value per share,
15,000,000 shares authorized; issued 1,743,525 shares at
August 3, 2013, February 2, 2013 and July 28, 2012		58		58		58
Additional paid-in capital		78,356		76,594		73,863
Retained earnings		303,751		266,843		327,420
Accumulated other comprehensive income		479		821		1,009
Total Stockholders' Equity		383,561		345,234		403,268
Total Liabilities and Stockholders’ Equity	$	567,413	$	532,646	$	573,382

See notes to condensed consolidated financial statements (unaudited).

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THE CATO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		Six Months Ended
	August 3, 2013		July 28, 2012
		(Dollars in thousands)
Operating Activities:
Net income	$	45,614	$	49,055
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation		10,885		11,513
Provision for doubtful accounts		696		596
Share-based compensation		1,489		1,444
Excess tax benefits from share-based compensation		(28)		(98)
Loss on disposal of property and equipment		268		610
Changes in operating assets and liabilities which provided
(used) cash:
Accounts receivable		(588)		(945)
Merchandise inventories		29,532		23,348
Prepaid and other assets		(3,419)		1,489
Accrued income taxes		8,259		4,509
Accounts payable, accrued expenses and other liabilities		(16,957)		(20,982)
Net cash provided by operating activities		75,751		70,539
Investing Activities:
Expenditures for property and equipment		(10,606)		(19,922)
Purchase of short-term investments		(11,756)		(100,289)
Sales of short-term investments		11,347		94,792
Change in restricted cash and investments		1,192		14
Net cash used in investing activities		(9,823)		(25,405)
Financing Activities:
Dividends paid		(2,939)		(14,027)
Repurchase of common stock		(5,780)		(355)
Proceeds from employee stock purchase plan		214		259
Excess tax benefits from share-based compensation		28		98
Proceeds from stock options exercised		39		41
Net cash used in financing activities		(8,438)		(13,984)
Net increase in cash and cash equivalents		57,490		31,150
Cash and cash equivalents at beginning of period		31,069		34,893
Cash and cash equivalents at end of period	$	88,559	$	66,043
Non-cash investing activity:
Change in accrued plant and equipment	$	(5,893)	$	-

See notes to condensed consolidated financial statements (unaudited).

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

NOTE 1 - GENERAL: 

The condensed consolidated financial statements have been prepared from the accounting records of The Cato Corporation and its wholly-owned subsidiaries (the “Company”), and all amounts shown as of and for the three and six month periods ended August 3, 2013 and July 28, 2012 are unaudited.  In the opinion of management, all adjustments considered necessary for a fair statement have been included.  All such adjustments are of a normal, recurring nature unless otherwise noted.  The results of the interim period may not be indicative of the results expected for the entire year.

The interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2013.  Amounts as of February 2, 2013, have been derived from the audited balance sheet, but do not include all disclosures required by accounting principles generally accepted in the United States of America.

On August 29, 2013, the Board of Directors maintained the quarterly dividend at $0.05 per share. The Board of Directors previously accelerated the full fiscal year 2013 dividend of $1.00 on December 28, 2012.

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

NOTE 2 - EARNINGS PER SHARE:

ASC 260 – Earnings Per Share requires dual presentation of basic and diluted Earnings Per Share (“EPS”) on the face of all income statements for all entities with complex capital structures.  The Company has presented one basic EPS and one diluted EPS amount for all common shares in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income.  While the Company’s certificate of incorporation provides the right for the Board of Directors to declare dividends on Class A shares without declaration of commensurate dividends on Class B shares, the Company has historically paid the same dividends to both Class A and Class B shareholders and the Board of Directors has resolved to continue this practice.  Accordingly, the Company’s allocation of income for purposes of the EPS computation is the same for Class A and Class B shares and the EPS amounts reported herein are applicable to both Class A and Class B shares.

Basic EPS is computed as net income less earnings allocated to non-vested equity awards divided by the weighted average number of common shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options and the Employee Stock Purchase Plan.   

			Three Months Ended				Six Months Ended
			August 3, 2013		July 28, 2012		August 3, 2013		July 28, 2012
Numerator
	Net earnings	$	14,775	$	17,333	$	45,614	$	49,055
	Earnings allocated to non-vested equity awards		(251)		(267)		(733)		(764)
	Net earnings available to common stockholders	$	14,524	$	17,066	$	44,881	$	48,291
Denominator
	Basic weighted average common shares outstanding		28,736,214		28,813,766		28,784,425		28,759,821
	Dilutive effect of stock options		4,859		4,285		3,537		4,231
	Diluted weighted average common shares outstanding		28,741,073		28,818,051		28,787,962		28,764,052
Net income per common share
	Basic earnings per share	$	0.51	$	0.59	$	1.56	$	1.68
	Diluted earnings per share	$	0.51	$	0.59	$	1.56	$	1.68

NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION:

Income tax payments, net of refunds received, for the six months ended August 3, 2013 and July 28, 2012 were $18,171,000 and $25,470,000, respectively.

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

NOTE 4 – FINANCING ARRANGEMENTS:

As of August 3, 2013, the Company had an unsecured revolving credit agreement to borrow $35.0 million.  During 2013, the revolving credit agreement was amended and extended to August 2015.  The credit agreement contains various financial covenants and limitations, including the maintenance of specific financial ratios with which the Company was in compliance as of August 3, 2013.  There were no borrowings outstanding under this credit facility during the periods ended August 3, 2013, February 2, 2013 or July 28, 2012.  The weighted average interest rate under the credit facility was zero at August 3, 2013 due to no borrowings during the year.

At August 3, 2013, February 2, 2013 and July 28, 2012, the Company had approximately $0.6 million, $2.9 million and $5.8 million, respectively, of outstanding irrevocable letters of credit related to purchase commitments.

NOTE 5 – REPORTABLE SEGMENT INFORMATION:

The Company has determined that it has four operating segments, as defined under ASC 280-10, including Cato, It’s Fashion, Versona Accessories and Credit.  As outlined in ASC 280-10, the Company has two reportable segments: Retail and Credit.  The Company has aggregated its retail operating segments based on the aggregation criteria outlined in ASC 280-10, which states that two or more operating segments may be aggregated into a single reportable segment if aggregation is consistent with the objective and basic principles of ASC 280-10, if the segments have similar economic characteristics, similar product, similar production processes, similar clients and similar methods of distribution. 

The Company’s retail operating segments have similar economic characteristics and similar operating, financial and competitive risks.  They are similar in nature of product, as they all offer women’s apparel, shoes and accessories.  Merchandise inventory of the Company’s operating segments is sourced from the same countries and some of the same vendors, using similar production processes.  Clients of the Company’s operating segments have similar characteristics.  Merchandise for the Company’s operating segments is distributed to retail stores in a similar manner through the Company’s single distribution center and is subsequently distributed to clients in a similar manner, through its retail stores.

The Company operates its women’s fashion specialty retail stores principally in the southeastern United States, and does business in 31 states total as of August 3, 2013. The Company offers its own credit card to its customers and all credit authorizations, payment processing and collection efforts are performed by a separate subsidiary of the Company.

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

NOTE 5 – REPORTABLE SEGMENT INFORMATION (CONTINUED):

The following schedule summarizes certain segment information (in thousands):

Three Months Ended				Six Months Ended
August 3, 2013	Retail	Credit	Total	August 3, 2013	Retail	Credit	Total
Revenues	$ 230,163	$ 1,555	$ 231,718	Revenues	$ 498,242	$ 3,174	$ 501,416
Depreciation	5,427	9	5,436	Depreciation	10,863	22	10,885
Interest and other income	(730)	-	(730)	Interest and other income	(1,605)	-	(1,605)
Income before taxes	22,474	623	23,097	Income before taxes	70,808	1,123	71,931
Total assets	501,281	66,132	567,413	Total assets	501,281	66,132	567,413
Capital expenditures	5,001	-	5,001	Capital expenditures	10,606	-	10,606
Three Months Ended				Six Months Ended
July 28, 2012	Retail	Credit	Total	July 28, 2012	Retail	Credit	Total
Revenues	$ 232,230	$ 1,833	$ 234,063	Revenues	$ 505,772	$ 3,635	$ 509,407
Depreciation	5,729	13	5,742	Depreciation	11,487	26	11,513
Interest and other income	(985)	-	(985)	Interest and other income	(1,891)	-	(1,891)
Income before taxes	26,747	880	27,627	Income before taxes	77,281	1,638	78,919
Total assets	495,526	77,856	573,382	Total assets	495,526	77,856	573,382
Capital expenditures	10,569	-	10,569	Capital expenditures	19,922	-	19,922

The Company evaluates segment performance based on income before taxes.  The Company does not allocate certain corporate expenses or income taxes to the credit segment.

The following schedule summarizes the direct expenses of the credit segment which are reflected in selling, general and administrative expenses (in thousands):

	Three Months Ended				Six Months Ended
		August 3, 2013		July 28, 2012		August 3, 2013		July 28, 2012
Bad debt expense	$	314	$	293	$	696	$	596
Payroll		234		224		465		445
Postage		180		192		379		385
Other expenses		195		231		489		545
Total expenses	$	923	$	940	$	2,029	$	1,971

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

NOTE 6 – STOCK BASED COMPENSATION:

As of August 3, 2013, the Company had two long-term compensation plans pursuant to which stock-based compensation was outstanding or could be granted. The Company’s 1987 Non-Qualified Stock Option Plan is for the granting of options to officers and key employees and the 2013 Incentive Compensation Plan is for the granting of various forms of equity-based awards, including restricted stock and stock options for grant, to officers, directors and key employees.  Effective May 23, 2013, shares for grant were no longer available under the 2004 Amended and Restated Incentive Compensation Plan.

The following table presents the number of options and shares of restricted stock initially authorized and available for grant under each of the plans as of August 3, 2013:

	1987	2004	2013
	Plan	Plan	Plan	Total
Options and/or restricted stock initially authorized	5,850,000	1,350,000	1,500,000	8,700,000
Options and/or restricted stock available for grant:
February 2, 2013	20,127	443,566	-	463,693
August 3, 2013	-	-	1,489,152	1,489,152

In accordance with ASC 718, the fair value of current restricted stock awards is estimated on the date of grant based on the market price of the Company’s stock and is amortized to compensation expense on a straight-line basis over the related vesting periods. As of August 3, 2013, February 2, 2013 and July 28, 2012, there was $9.9 million, $6.4 million  and $7.7 million of total unrecognized compensation expense related to nonvested restricted stock awards, which have a remaining weighted-average vesting period of 4.5 years, 2.3 years and 2.8 years, respectively. The total fair value of the shares recognized as compensation expense during the second quarter and six months ended August 3, 2013 was $1,018,000 and $1,448,000, respectively compared to $794,000 and $1,398,000, respectively for the second quarter and six months ended July 28, 2012. These expenses are classified as a component of selling, general and administrative expenses in the Condensed Consolidated Statements of Income.

The following summary shows the changes in the shares of restricted stock outstanding during the six months ended August 3, 2013:

			Weighted Average
	Number of		Grant Date Fair
	Shares		Value Per Share
Restricted stock awards at February 2, 2013	440,146	$	23.70
Granted	214,385		23.57
Vested	(119,652)		19.85
Forfeited or expired	(23,212)		24.81
Restricted stock awards at August 3, 2013	511,667	$	24.49

The Company’s Employee Stock Purchase Plan allows eligible full-time employees to purchase a limited number of shares of the Company’s Class A Common Stock during each semi-annual offering period at a 15% discount through payroll deductions. During the six months ended August 3, 2013 and July 28, 2012, the Company sold 10,418 and 11,687 shares to employees at an average discount of $3.62 and $3.92 per share, respectively, under the Employee Stock Purchase Plan. The compensation expense recognized for the 15% discount given under the Employee Stock Purchase Plan was approximately $38,000 and $46,000 for the six months ended August 3, 2013 and July 28, 2012, respectively.  These expenses are classified as a component of selling, general and administrative expenses.

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

The following is a summary of changes in stock options outstanding during the six months ended August 3, 2013.
				Weighted
			Weighted	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Shares		Price	Term		Value(a)
Options outstanding at February 2, 2013	9,550	$	13.47	2.12 years	$	136,185
Granted	20,127		23.57
Forfeited or expired	-
Exercised	(2,500)		14.09
Outstanding at August 3, 2013	27,177	$	20.89	7.41 years	$	131,922
Vested and exercisable at August 3, 2013	7,050	$	13.25	0.72 years	$	88,046

(a) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.

20,127 options were granted in the first six months of fiscal 2013. No options were granted in the first six months of fiscal 2012.

The total intrinsic value of options exercised during the second quarter and six months ended August 3, 2013 was $17,000 and $27,000, respectively compared to $28,000 and $50,000, respectively, for the second quarter and six months ended July 28, 2012.

The stock option expense was $5,000 for the three and six months ended August 3, 2013 and zero for the three and six  months ended July 28, 2012.

Stock option awards outstanding under the Company’s current plans were granted at exercise prices which were equal to the market value of the Company’s stock on the date of grant, vest over five years and expire no later than ten years after the grant date.

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

NOTE 7 – FAIR VALUE MEASUREMENTS:

The following tables set forth information regarding the Company’s financial assets that are measured at fair value (in thousands) as of August 3, 2013, February 2, 2013 and July 28, 2012.

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		August 3, 2013	Assets		Inputs		Inputs
Description			Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	158,080	$	-	$	158,080	$	-
Auction Rate Securities (ARS)		3,450		-		-		3,450
U.S. Treasury Notes		1,504		1,504		-		-
Cash Surrender Value of Life Insurance		2,633		-		-		2,633
Privately Managed Funds		471		-		-		471
Corporate Equities		591		591		-		-
Certificates of Deposit		100		100		-		-
Total Assets	$	166,829	$	2,195	$	158,080	$	6,554
Liabilities:
Deferred Compensation		(2,746)		-		-		(2,746)
Total Liabilities	$	(2,746)	$	-	$	-	$	(2,746)

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		February 2, 2013	Assets		Inputs		Inputs
Description			Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	151,377	$	-	$	151,377	$	-
Corporate Bonds		8,035		-		8,035		-
Auction Rate Securities (ARS)		3,450		-		-		3,450
U.S. Treasury Notes		3,906		3,906		-		-
Cash Surrender Value of Life Insurance		2,051		-		-		2,051
Privately Managed Funds		561		-		-		561
Corporate Equities		474		474		-		-
Certificates of Deposit		100		100		-		-
Total Assets	$	169,954	$	4,480	$	159,412	$	6,062
Liabilities:
Deferred Compensation		(2,178)		-		-		(2,178)
Total Liabilities	$	(2,178)	$	-	$	-	$	(2,178)

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		July 28, 2012	Assets		Inputs		Inputs
Description			Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	176,206	$	-	$	176,206	$	-
Corporate Bonds		18,884		-		18,884		-
Auction Rate Securities (ARS)		3,450		-		-		3,450
Variable Rate Demand Notes (VRDN)		16,865		16,865		-		-
U.S. Treasury Notes		3,162		3,162		-		-
Privately Managed Funds		871		-		-		871
Corporate Equities		439		439		-		-
Certificates of Deposit		101		101		-		-
Total Assets	$	219,978	$	20,567	$	195,090	$	4,321

The Company’s investment portfolio was primarily invested in corporate bonds and tax-exempt and taxable governmental debt securities held in managed accounts with underlying ratings of A or better at August 3, 2013, February 2, 2013 and July 28, 2012.  These securities are classified as available-for-sale and are recorded as Short-term investments, Restricted investments and Other assets on the accompanying Condensed Consolidated Balance Sheets. These assets are carried at fair value with unrealized gains and losses reported net of taxes in Accumulated other comprehensive income.

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

Additionally, at August 3, 2013, the Company had $0.5 million of privately managed funds, $0.6 million of corporate equities and a single auction rate security (“ARS”) of $3.5 million which continues to fail its auction, and deferred compensation plan assets of $2.6 million.  At February 2, 2013, the Company had $0.6 million of privately managed funds, $0.5 million of corporate equities, a single ARS of $3.5 million and deferred compensation plan assets of $2.1 million.  At July 28, 2012, the Company had $0.9 million of privately managed funds, $0.4 million of corporate equities and a single ARS of $3.5 million.  All of these assets are recorded within Other assets in the Condensed Consolidated Balance Sheets.

Level 1 category securities are measured at fair value using quoted active market prices.  Level 2 investment securities include corporate and municipal bonds for which quoted prices may not be available on active exchanges for identical instruments.  Their fair value is principally based on market values determined by management with assistance of a third party pricing service.  Since quoted prices in active markets for identical assets are not available, these prices are determined by the pricing service using observable market information such as quotes from less active markets and/or quoted prices of securities with similar characteristics, among other factors.

The ARS of $3,450,000 par value was issued by the Wake County, NC Industrial Facilities & Pollution Control Financing Authority. The security is an obligation of Carolina Power & Light Company and has a credit rating of AAA. The Company has collected all interest payments when due since the security was purchased and continues to expect that it will receive all interest due on the security in full and on a timely basis in the future.

The Company’s failed ARS is recorded at par value which approximates fair value using Level 3 inputs at each reporting period.  Because there is no active market for this particular ARS, its fair value was determined to approximate par value based on an estimate of fair value through the use of a discounted cash flow analysis. The terms used in the analysis were based on management’s estimate of the timing of future liquidity, which assumes that the security will be called or refinanced by the issuer or settled with a broker dealer prior to maturity. The discount rates used in the discounted cash flow analysis were based on market rates for similar liquid tax exempt securities with comparable ratings and maturities. Due to the uncertainty surrounding the timing of future liquidity, the Company also considered a liquidity/risk value reduction. In estimating the fair value of this ARS, the Company also considered the financial condition and near-term prospects of the issuer, the probability that the Company will be unable to collect all amounts due according to the contractual terms of the security and whether the security has been downgraded by a rating agency.  The Company’s valuation is sensitive to market conditions and management’s judgment and can change significantly based on the assumptions used.

The Company’s privately managed funds consist of two types of funds.  The privately managed funds cannot be redeemed at net asset value at a specific date without advance notice.  As a result, the Company has classified the investments as Level 3.

Deferred compensation plan assets consist of life insurance policies. These life insurance policies are valued based on the cash surrender value of the insurance contract, which is determined based on such factors as the fair value of the underlying assets and discounted cash flow and are therefore classified within level 3 of the valuation hierarchy. The level 3 liability associated with the life insurance policies represents a deferred compensation obligation, the value of which is tracked via underlying insurance funds. These funds are designed to mirror existing mutual funds and money market funds that are observable and actively traded. Cash surrender values are provided by third parties and reviewed for reasonableness by the Company.

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

The following tables summarize the change in fair value of the Company’s financial assets measured using Level 3 inputs as of August 3, 2013 and July 28, 2012 (dollars in thousands):

				Fair Value Measurements Using Significant
				Unobservable Asset Inputs (Level 3)
			Available-For-Sale						Cash
			Debt Securities			Other Investments			Surrender
			ARS			Private Equity			Value		Total
	Beginning Balance at February 2, 2013		$	3,450		$	561	$	2,051		$	6,062
	Redemptions			-			(97)		-			(97)
	Additions			-			-		494			494
	Total gains or (losses)
	Included in earnings (or changes in net assets)			-			7		88			95
	Included in other comprehensive income			-			-		-			-
	Ending Balance at August 3, 2013		$	3,450		$	471	$	2,633		$	6,554
			Fair Value Measurements Using Significant
			Unobservable Liability Inputs (Level 3)
			Deferred
			Compensation				Total
	Beginning Balance at February 2, 2013		$	(2,178)		$	(2,178)
	Additions			(425)			(425)
	Total (gains) or losses
	Included in earnings (or changes in net assets)			(143)			(143)
	Included in other comprehensive income			-			-
	Ending Balance at August 3, 2013		$	(2,746)		$	(2,746)
			Fair Value Measurements Using Significant
			Unobservable Asset Inputs (Level 3)
			Available-For-Sale
			Debt Securities			Other Investments
			ARS			Private Equity			Total
	Beginning Balance at January 28, 2012		$	3,450		$	1,604	$	5,054
	Redemptions			-			(722)		(722)
	Assets
	Total gains or (losses)
	Included in earnings (or changes in net assets)			-			(11)		(11)
	Included in other comprehensive income			-			-		-
	Ending Balance at July 28, 2012		$	3,450		$	871	$	4,321
Quantitative information regarding the significant unobservable inputs related to the ARS as of August 3, 2013 and July 28, 2012 were as follows:
As of August 3, 2013
Fair Value		Valuation Technique			Unobservable Inputs
$3,450		Net present value			Total Term					9.1 Years
		of cash flows			Yield					0.11%
					Comparative bond discount rate					0.19%
As of July 28, 2012
Fair Value		Valuation Technique			Unobservable Inputs
$3,450		Net present value			Total Term					10.1 Years
		of cash flows			Yield					0.28%
					Comparative bond discount rate					0.20%
Significant increases or decreases in certain of the inputs could result in a lower fair value measurement. For example, a decrease in the yield, or an increase to the comparative bond discount rate could result in a lower fair value.

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

NOTE 8 – ACCUMULATED OTHER COMPREHENSIVE INCOME:

The following table sets forth information regarding the reclassification out of Accumulated other comprehensive income (in thousands) for the first three months of fiscal 2013:

	Changes in Accumulated Other
	Comprehensive Income (a)
			Unrealized Gains
			and (Losses) on
			Available-for-Sale
			Securities
Beginning Balance at May 4, 2013		$	932
Other comprehensive income before
reclassifications			(436)
Amounts reclassified from accumulated
other comprehensive income (b)			(17)
Net current-period other comprehensive income			(453)
Ending Balance at August 3, 2013		$	479
(a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reduction to OCI.
(b) Includes $28 impact of accumulated other comprehensive income reclassifications into Interest and other income for net gains on available-for-sale securities. The tax impact of this reclassification was $11.

The following table sets forth information regarding the reclassification out of Accumulated other comprehensive income (in thousands) for the first six months of fiscal 2013:

	Changes in Accumulated Other
	Comprehensive Income (a)
			Unrealized Gains
			and (Losses) on
			Available-for-Sale
			Securities
Beginning Balance at February 2, 2013		$	821
Other comprehensive income before
reclassifications			(283)
Amounts reclassified from accumulated
other comprehensive income (b)			(59)
Net current-period other comprehensive income			(342)
Ending Balance at August 3, 2013		$	479
(a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reduction to OCI.
(b) Includes $94 impact of accumulated other comprehensive income reclassifications into Interest and other income for net gains on available-for-sale securities. The tax impact of this reclassification was $35.

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

NOTE 9 – RECENT ACCOUNTING PRONOUNCEMENTS:

During the first quarter of 2013, the Company adopted guidance that requires additional disclosures on reclassifications from accumulated other comprehensive income into net income. The new accounting guidance requires entities to report either parenthetically on the face of the financial statements or in the footnotes of these reclassifications for each financial statement line item. This new guidance only impacts disclosures and as such will have no impact on the Company’s consolidated financial position, results of operations or cash flows.

In the first quarter of 2014, the Company will adopt new accounting guidance which requires unrecognized tax benefits to be presented as a decrease in net operating loss, similar to tax loss or tax credit carryforward if certain criteria are met. The new guidance may affect balance sheet classification of certain unrecognized tax benefits and will have no impact on the Company’s consolidated results of operations or cash flows,

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THE CATO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ANDSIX MONTHS ENDED AUGUST 3, 2013 AND JULY 28, 2012

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THE CATO CORPORATION

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING INFORMATION:

The following information should be read along with the unaudited Condensed Consolidated Financial Statements, including the accompanying Notes appearing in this report. Any of the following are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended: (1) statements in this Form 10-Q that reflect projections or expectations of our future financial or economic performance; (2) statements that are not historical information; (3) statements of our beliefs, intentions, plans and objectives for future operations, including those contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; (4) statements relating to our operations or activities for fiscal 2013 and beyond, including, but not limited to, statements regarding expected amounts of capital expenditures and store openings, relocations, remodels and closures; and (5) statements relating to our future contingencies. When possible, we have attempted to identify forward-looking statements by using words such as “will,” “expects,” “anticipates,” “approximates,” “believes,” “estimates,” “hopes,” “intends,” “may,” “plans,” “should” and any variations or negative formations of such words and similar expressions. We can give no assurance that actual results or events will not differ materially from those expressed or implied in any such forward-looking statements. Forward-looking statements included in this report are based on information available to us as of the filing date of this report, but 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:  any actual or perceived deterioration in, or uncertainties regarding, prevailing U.S. and global economic, political or financial market conditions; changes in other factors that drive consumer or corporate confidence and spending, including, but not limited to, levels of unemployment, fuel, energy and food costs, wage rates, tax rates, home values, consumer net worth and the availability of credit; uncertainties regarding the impact of any governmental responses to the foregoing conditions; competitive factors and pricing pressures; our ability to predict fashion trends; consumer apparel and accessory buying patterns; adverse weather or similar conditions that may affect our sales or operations; inventory risks due to shifts in market demand; and other factors discussed under “Risk Factors” in Part I, Item 1A of our annual report on Form 10-K for the fiscal year ended February 2, 2013 (“fiscal 2012”), as amended or supplemented, and in other reports we file with or furnish to the Securities and Exchange Commission (“SEC”) from time to time.  We do not undertake, and expressly decline, any obligation to update any such forward-looking information contained in this report, whether as a result of new information, future events, or otherwise.

CRITICAL ACCOUNTING POLICIES:

The Company’s accounting policies are more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2013. As disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the preparation of the Company’s financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include the allowance for doubtful accounts receivable, reserves related to self-insured health insurance, workers’ compensation, general and auto insurance liabilities, calculation of potential asset impairment, inventory shrinkage and uncertain tax positions.

The Company’s critical accounting policies and estimates are discussed with the Audit Committee.

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THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS:

The following table sets forth, for the periods indicated, certain items in the Company's unaudited Condensed Consolidated Statements of Income as a percentage of total retail sales:

	Three Months Ended				Six Months Ended
	August 3, 2013		July 28, 2012		August 3, 2013		July 28, 2012
Total retail sales	100.0	%	100.0	%	100.0	%	100.0	%
Other revenue	1.0		1.1		1.0		1.0
Total revenues	101.0		101.1		101.0		101.0
Cost of goods sold (exclusive of depreciation)	63.2		61.6		60.8		59.6
Selling, general and administrative (exclusive of depreciation)	25.7		25.6		23.8		23.9
Depreciation	2.4		2.5		2.2		2.3
Interest and other income	(0.3)		(0.4)		(0.3)		(0.4)
Income before income taxes	10.1		11.9		14.5		15.6
Net income	6.4		7.5		9.2		9.7

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THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS (CONTINUED):

Comparison of Second  Quarter of 2013 with 2012

Total retail sales for the second quarter were $229.4 million compared to last year’s second quarter sales of $231.5 million, a 1.0% decrease.  Same-store sales decreased 2.0% in the second quarter of fiscal 2013.  For the six months ended August 3, 2013, total retail sales were $496.6 million compared to last year’s comparable six month sales of $504.2 million, and same-store sales decreased 4.0% for the comparable six month period. The Company believes the second quarter and first six month period of fiscal 2013 were both affected by slow economic growth, high unemployment and our customers’ limited discretionary spending.  Same-store sales includes stores that have been open more than 15 months.  Stores that have been relocated or expanded are also included in the same-store sales calculation after they have been open more than 15 months.  The method of calculating same-store sales varies across the retail industry.  As a result, our same-store sales calculation may not be comparable to similarly titled measures reported by other companies.  Total revenues, comprised of retail sales and other revenue (principally, finance charges and late fees on customer accounts receivable and layaway fees), were $231.7 million and $501.4 million for the second quarter and six months ended August 3, 2013, compared to $234.1 million and $509.4 million for the second quarter and six months ended July 28, 2012, respectively. The Company operated 1,306 stores at August 3, 2013 compared to 1,295 stores at the end of last year’s second quarter.  For the first six months of fiscal  2013, the Company opened four new stores, relocated three stores and closed eight stores.  The Company currently expects to open approximately 51 stores, relocate nine stores and close approximately 17 stores in fiscal 2013.

Credit revenue of $1.6 million represented 0.7% of total revenues in the second quarter of fiscal 2013, compared to 2012 credit revenue of $1.8 million or 0.8% of total revenues.  Credit revenue dollars decreased slightly for the most recent comparable period due to lower finance charge income and lower late fee income from sales under the Company’s proprietary credit card. Credit revenue is comprised of interest earned on the Company’s private label credit card portfolio and related fee income.  Related expenses principally include bad debt expense, payroll, postage and other administrative expenses and remained flat at $0.9 million for both comparable quarters.

Other revenue in total, as included in total revenues, was $2.3 million and $4.9 million for the second quarter and first six months of fiscal 2013, compared to $2.6 million and $5.2 million for the prior year’s comparable second quarter and first six months. The slight overall decrease in the second quarter and first six months of fiscal 2013 resulted primarily from lower finance, late fee and layaway charges.

Cost of goods sold was $145.0 million, or 63.2% of retail sales and $301.9 million or 60.8% of retail sales for the second quarter and first six months of fiscal 2013, compared to $142.5 million, or 61.6% of retail sales and $300.3 million or 59.6% of retail sales for the prior year’s comparable three and six month periods of fiscal 2012.  The overall increase in cost of goods sold as a percent of retail sales for the second quarter of fiscal 2013 resulted primarily from an increase in markdowns and occupancy costs related to store development. Cost of goods sold includes merchandise costs (net of discounts and allowances), buying costs, distribution costs, occupancy costs, freight and inventory shrinkage.  Net merchandise costs and in-bound freight are capitalized as inventory costs.  Buying and distribution costs include payroll, payroll-related costs and operating expenses for the buying departments and distribution center.  Occupancy expenses include rent, real estate taxes, insurance, common area maintenance, utilities and maintenance for stores and distribution facilities.  Total gross margin dollars (retail sales less cost of goods sold exclusive of depreciation) decreased by 5.2% to $84.4 million for the second quarter of fiscal 2013 and decreased by 4.5% to $194.7 million for the first six months of fiscal 2013 compared to $89.0 million and $203.9 million for the prior year’s comparable three and six months of fiscal 2012.  Gross margin as presented may not be comparable to those of other entities.

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THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Selling, general and administrative expenses (“SG&A”) primarily include corporate and store payroll, related payroll taxes and benefits, insurance, supplies, advertising, bank and credit card processing fees and bad debts.  SG&A expenses were $59.0 million, or 25.7% of retail sales and $118.4 million, or 23.8% of retail sales for the second quarter and first six months of fiscal 2013, respectively, compared to $59.2 million, or 25.6% of retail sales and $120.6 million, or 23.9% of retail sales for the prior year’s comparable three and six month periods, respectively.  SG&A expenses as a percentage of retail sales slightly increased for the second quarter of fiscal 2013 as a result of higher insurance costs, partially offset by lower incentive compensation expense.  For the first six months of fiscal 2013, SG&A expenses as a percentage of retail sales slightly decreased due to lower incentive compensation expense, partially offset by higher insurance expense and higher payroll costs.

Depreciation expense was $5.4 million, or 2.4% of retail sales and $10.9 million, or 2.2% of retail sales for the second quarter and first six months of fiscal 2013, respectively, compared to $5.7 million, or 2.5% of retail sales and $11.5 million or 2.3% of retail sales for the prior year’s comparable three and six month periods of fiscal 2012, respectively.  The slight decrease in depreciation expense was due to limited overall store development compared to prior years.

Interest and other income was $0.7 million, or 0.3% of retail sales and $1.6 million, or 0.3% of retail sales for the second quarter and first six months of fiscal 2013, respectively, compared to $1.0 million, or 0.4% of retail sales and $1.9 million, or 0.4% of retail sales for the prior year’s comparable three and six month periods of fiscal 2012.  The slight decrease was due to lower interest income driven by lower interest rates in the second fiscal quarter of 2013 and the first six months of fiscal 2013.

Income tax expense was $8.3 million or 3.6% of retail sales and $26.3  million, or 5.3% of retail sales for the second  quarter and first six  months of fiscal 2013, respectively, compared to $10.3 million, or 4.4% of retail sales and $29.9 million, or 5.9% of retail sales for the prior year’s comparable three and six  month periods of fiscal 2012, respectively. The second  quarter decrease resulted from lower pre-tax income and a lower effective tax rate.  The effective income tax rate for the second  quarter of fiscal 2013 was 36.0% compared to 37.3% for the second  quarter of 2012. The effective tax rate for the first six  months of fiscal 2013 was 36.6% compared to 37.8% for the first six  months of fiscal 2012.  This decrease is due to the Work Opportunity Tax Credit, which had not been renewed by Congress at this time last year and was therefore not in effect for second quarter 2012, but was for second quarter 2013.   

LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK:

The Company has consistently maintained a strong liquidity position. Cash provided by operating activities during the first six months of fiscal 2013 was $75.8 million as compared to $70.5 million in the first six months of fiscal 2012. These amounts enable the Company to fund its regular operating needs, capital expenditure program, cash dividend payments, and share repurchases.  In addition, the Company maintains a $35.0 million unsecured revolving credit facility for short-term financing of seasonal cash needs. There were no outstanding borrowings on this facility at August 3, 2013, February 2, 2013 and July 28, 2012.

Table of Contents

THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK (CONTINUED):

Cash provided by operating activities for the first six months of fiscal 2013 was primarily generated by earnings adjusted for depreciation and changes in working capital. The increase of $5.3 million for the first six months of fiscal 2013 as compared to the first six months of fiscal 2012 was primarily due to an increase in accounts payable and slower growth in merchandise inventories.

The Company believes that its cash, cash equivalents and short-term investments, together with cash flows from operations and borrowings available under its revolving credit agreement, will be adequate to fund the Company’s regular operating requirements, expected capital expenditures, dividends and share repurchases for fiscal 2013 and for the foreseeable future.

At August 3, 2013, the Company had working capital of $263.6 million compared to $230.6 million at February 2, 2013 and $302.9 million at July 28, 2012.  Additionally, the Company had $1.1 million, $1.0 million and $1.3 million invested in privately managed investment funds and other miscellaneous equities and a single auction rate security of $3.5 million at August 3, 2013, February 2, 2013 and July 28, 2012, respectively, which are included in Other assets on the Condensed Consolidated Balance Sheets.

At August 3, 2013, February 2, 2013 and July 28, 2012, the Company had an unsecured revolving credit agreement, which provides for borrowings of up to $35.0 million.  The revolving credit agreement is committed until August 2015. The credit agreement contains various financial covenants and limitations, including the maintenance of specific financial ratios with which the Company was in compliance as of August 3, 2013.  There were no borrowings outstanding under the credit facility as of August 3, 2013, February 2, 2013 and July 28, 2012.

At August 3, 2013, February 2, 2013 and July 28, 2012, the Company had approximately $0.6 million, $2.9 million and $5.8 million, respectively, of outstanding irrevocable letters of credit relating to purchase commitments.

Expenditures for property and equipment totaled $10.6 million in the first six months of fiscal 2013, compared to $19.9 million in last year’s first six months.  The expenditures for the first six months of 2013 were primarily for the development of four new stores, additional investments in new technology, home office renovations and the e-commerce initiative.  For the full fiscal 2013 year, the Company expects to invest approximately $42.0 million for capital expenditures.  This includes expenditures to open 51 new stores and relocate nine stores, the home office renovations and e-commerce start-up.

Net cash used in investing activities totaled $9.8 million in the first six months of fiscal 2013 compared to $25.4 million used in the comparable period of 2012.  The decrease was due primarily to a decrease in expenditures for property and a net decrease in purchases and sales of short-term investments.

On August 29, 2013, the Board of Directors maintained the quarterly dividend at $0.05 per share.  The Board of Directors previously accelerated the full year 2013 dividend of $1.00 on December 28, 2012.

As of August 3, 2013, the Company had 1,728,115 shares remaining in open authorizations under its share repurchase program. 

The Company does not use derivative financial instruments.

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THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

The Company’s investment portfolio was primarily invested in corporate bonds and tax-exempt and taxable governmental debt securities held in managed accounts with underlying ratings of A or better at August 3, 2013, February 2, 2013 and July 28, 2012.  At July 28, 2012, the Company also held tax-exempt variable rate demand notes (“VRDN”). These securities are classified as available-for-sale and are recorded as Short-term investments, Restricted investments and Other assets on the accompanying Condensed Consolidated Balance Sheets at estimated fair value, with unrealized gains and losses reported net of taxes in Accumulated other comprehensive income.

Additionally, at August 3, 2013, the Company had $0.5 million of privately managed funds, $0.6 million of corporate equities and a single auction rate security (“ARS”) of $3.5 million which continues to fail its auction, and deferred compensation plan assets of $2.6 million.  At February 2, 2013, the Company had $0.6 million of privately managed funds, $0.5 million of corporate equities, a single ARS of $3.5 million and deferred compensation plan assets of $2.1 million.  At July 28, 2012, the Company had $0.9 million of privately managed funds, $0.4 million of corporate equities and a single ARS of $3.5 million.  All of these assets are recorded within Other assets in the Condensed Consolidated Balance Sheets.

Level 1 category securities are measured at fair value using quoted active market prices.  Level 2 investment securities include corporate and municipal bonds for which quoted prices may not be available on active exchanges for identical instruments.  Their fair value is principally based on market values determined by management with assistance of a third party pricing service.  Since quoted prices in active markets for identical assets are not available, these prices are determined by the pricing service using observable market information such as quotes from less active markets and/or quoted prices of securities with similar characteristics, among other factors.

The ARS of $3,450,000 par value was issued by the Wake County, NC Industrial Facilities & Pollution Control Financing Authority. The security is an obligation of Carolina Power & Light Company and has a credit rating of AAA. The Company has collected all interest payments when due since the security was purchased and continues to expect that it will receive all interest due on the security in full and on a timely basis in the future.

The Company’s failed ARS is recorded at par value which approximates fair value using Level 3 inputs at each reporting period.  Because there is no active market for this particular ARS, its fair value was determined to approximate par value based on an estimate of fair value through the use of a discounted cash flow analysis. The terms used in the analysis were based on management’s estimate of the timing of future liquidity, which assumes that the security will be called or refinanced by the issuer or settled with a broker dealer prior to maturity. The discount rates used in the discounted cash flow analysis were based on market rates for similar liquid tax exempt securities with comparable ratings and maturities. Due to the uncertainty surrounding the timing of future liquidity, the Company also considered a liquidity/risk value reduction. In estimating the fair value of this ARS, the Company also considered the financial condition and near-term prospects of the issuer, the probability that the Company will be unable to collect all amounts due according to the contractual terms of the security and whether the security has been downgraded by a rating agency.  The Company’s valuation is sensitive to market conditions and management’s judgment and can change significantly based on the assumptions used.

The Company’s privately managed funds consist of two types of funds.  The privately managed funds cannot be redeemed at net asset value at a specific date without advance notice.  As a result, the Company has classified the investments as Level 3.

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THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Deferred compensation plan assets consist of life insurance policies. These life insurance policies are valued based on the cash surrender value of the insurance contract, which is determined based on such factors as the fair value of the underlying assets and discounted cash flow and are therefore classified within level 3 of the valuation hierarchy. The level 3 liability associated with the life insurance policies represents a deferred compensation obligation, the value of which is tracked via underlying insurance funds. These funds are designed to mirror existing mutual funds and money market funds that are observable and actively traded. Cash surrender values are provided by third parties and reviewed for reasonableness by the Company.

During the first quarter of 2013, the Company adopted guidance that requires additional disclosures on reclassifications from accumulated other comprehensive income into net income. The new accounting guidance requires entities to report either parenthetically on the face of the financial statements or in the footnotes of these reclassifications for each financial statement line item. This new guidance only impacts disclosures and as such will have no impact on the Company’s consolidated financial position, results of operations or cash flows.

In the first quarter of 2014, the Company will adopt new accounting guidance which requires unrecognized tax benefits to be presented as a decrease in net operating loss, similar to tax loss or tax credit carryforward if certain criteria are met. The new guidance may affect balance sheet classification of certain unrecognized tax benefits and will have no impact on the Company’s consolidated results of operations or cash flows,

Table of Contents

THE CATO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:

The Company is subject to market rate risk from exposure to changes in interest rates based on its financing, investing and cash management activities, but the Company does not believe such exposure is material.

ITEM 4. CONTROLS AND PROCEDURES: 

We carried out an evaluation, with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures as of August 3, 2013.  Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of August 3, 2013, our disclosure controls and procedures, as defined in Rule 13a-15(e), under the Securities Exchange Act of 1934 (the “Exchange Act”), were effective to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING:

No change in the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) has occurred during the Company’s fiscal quarter ended August 3, 2013 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Table of Contents

THE CATO CORPORATION

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 1.  LEGAL PROCEEDINGS

            Not Applicable

ITEM 1A.  RISK FACTORS

            In addition to the other information in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended February 2, 2013.  These risks could materially affect our business, financial condition or future results; however, they are not the only risks we face.  Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or results of operations.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

      The following table summarizes the Company’s purchases of its common stock for the three months ended August 3, 2013:

ISSUER PURCHASES OF EQUITY SECURITIES

				Total Number of	Maximum Number
				Shares Purchased as	(or Approximate Dollar
	Total Number		Average	Part of Publicly	Value) of Shares that may
	of Shares		Price Paid	Announced Plans or	Yet be Purchased Under
Period	Purchased		per Share (1)	Programs (2)	The Plans or Programs (2)
May 2013	-	$	-	-
June 2013	221		25.11	221
July 2013	-		-	-
Total	221	$	25.11	221	1,728,115

(1)Prices include trading costs.

(2)As of May 4, 2013, the Company’s share repurchase program had 1,728,336 shares remaining in open authorizations.  During the second quarter ending August 3, 2013, the Company repurchased and retired 221 shares under this program for approximately $5,550 or an average market price of $25.11 per share.  As of the second quarter ending August 3, 2013, the Company had 1,728,115 shares remaining in open authorizations.  There is no specified expiration date for the Company’s repurchase program.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

      Not Applicable

Table of Contents

PART IIOTHER INFORMATION

THE CATO CORPORATION

ITEM 4.  MINE SAFETY DISCLOSURES

      Not Applicable

ITEM 5.  OTHER INFORMATION

      Not Applicable

ITEM 6.  EXHIBITS

Exhibit No.	Item
3.1	Registrant’s Restated Certificate of Incorporation dated March 6, 1987, incorporated by reference to Exhibit 4.1 to Form S-8 of the Registrant filed February 7, 2000 (SEC File No. 333-96283).
3.2	Registrant’s By Laws incorporated by reference to Exhibit 99.2 to Form 8-K of the Registrant Filed December 10, 2007.
4.1	Rights Agreement dated December 18, 2003, incorporated by reference to Exhibit 4.1 to Form 8-A12G of the Registrant filed December 22, 2003 and as amended in Form 8-A12B/A filed January 6, 2004.
10.1*	2013 Incentive Compensation Plan, incorporated by reference to Exhibit 4.1 to Form S-8 of the Registrant filed May 31, 2013 (SEC File No. 333-188993).
31.1*	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
31.2*	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.
32.1*	Section 1350 Certification of Principal Executive Officer.
32.2*	Section 1350 Certification of Principal Financial Officer.
101.1*	The following materials from Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 3, 2013, formatted in XBRL: (i) Condensed Consolidated Statements of Income and Comprehensive Income for the Three Months and Six Months Ended August 3, 2013 and July 28, 2012; (ii) Condensed Consolidated Balance Sheets at August 3, 2013, February 2, 2013 and July 28, 2012; (iii) Condensed Consolidated Statements of Cash Flows for the Six Months Ended August 3, 2013 and July 28, 2012; and (iv) Notes to Condensed Consolidated Financial Statements.

                      * Submitted electronically herewith.       

Table of Contents

PART IIOTHER INFORMATION

THE CATO CORPORATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

                                                                                    THE CATO CORPORATION

August 30, 2013	/s/ John P. D. Cato
Date	John P. D. Cato Chairman, President and Chief Executive Officer
August 30, 2013	/s/ John R. Howe
Date	John R. Howe Executive Vice President Chief Financial Officer

EX-31

EXHIBIT 31.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION PURSUANT TO

SECURITIES EXCHANGE ACT OF 1934 RULE 13a-14(a)/15d-14(a), AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John P. D. Cato, certify that:

1.	I have reviewed this report on Form 10-Q of The Cato Corporation (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 30, 2013

/s/ John P. D. Cato

John P. D. Cato

Chairman, President and

Chief Executive Officer

EX-31

EXHIBIT 31.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION PURSUANT TO

SECURITIES EXCHANGE ACT OF 1934 RULE 13a-14(a)/15d-14(a), AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John R. Howe, certify that:

1.	I have reviewed this report on Form 10-Q of The Cato Corporation (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 30, 2013

/s/ John R. Howe

John R. Howe

Executive Vice President

Chief Financial Officer

EX-32

EXHIBIT 32.1

CERTIFICATION OF PERIODIC REPORT

I, John P. D. Cato, Chairman, President and Chief Executive Officer of The Cato Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that on the date of this Certification:

1.the Form 10-Q of the Company for the quarter ended August 3, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 30, 2013

/s/ John P. D. Cato

John P. D. Cato

Chairman, President and

Chief Executive Officer

EX-32

EXHIBIT 32.2

CERTIFICATION OF PERIODIC REPORT

I, John R. Howe, Executive Vice President, Chief Financial Officer of The Cato Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that on the date of this Certification:

1.the Form 10-Q of the Company for the quarter ended August 3, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.  the information contained in the Report fairly presents, in all material respects, the financial condition and
     results of operations of the Company.

Dated: August 30, 2013

/s/ John R. Howe

John R. Howe

Executive Vice President

Chief Financial Officer

XML

Stock Based Compensation - Plans (Tables)

3 Months Ended

Aug. 03, 2013

[DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract]

Stock Based Compensation Plans

	1987	2004	2013
	Plan	Plan	Plan	Total
Options and/or restricted stock initially authorized	5,850,000	1,350,000	1,500,000	8,700,000
Options and/or restricted stock available for grant:
February 2, 2013	20,127	443,566	0	463,693
August 3, 2013	0	0	1,489,152	1,489,152

The following is a summary of changes in stock options outstanding during the six months ended August 3, 2013.
				Weighted
			Weighted	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Shares		Price	Term		Value(a)
Options outstanding at February 2, 2013	9,550	$	13.47	2.12 years	$	136,185
Granted	20,127		23.57
Forfeited or expired	-
Exercised	(2,500)		14.09
Outstanding at August 3, 2013	27,177	$	20.89	7.41 years	$	131,922
Vested and exercisable at August 3, 2013	7,050	$	13.25	0.72 years	$	88,046

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Aug. 03, 2013	Feb. 02, 2013	Jul. 28, 2012
Current Assets:
Cash and cash equivalents	$ 88,559	$ 31,069	$ 66,043
Short-term investments	157,326	157,578	211,390
Restricted cash and investments	4,807	5,999	5,311
Accounts receivable, net of allowance for doubtful accounts	39,908	40,016	43,373
Merchandise inventories	111,206	140,738	107,034
Deferred income taxes	4,837	4,631	3,535
Prepaid expenses	10,997	10,183	4,160
Total Current Assets	417,640	390,214	440,846
Property and equipment - net	139,550	134,227	125,520
Other assets	10,223	8,205	7,016
Total Assets	567,413	532,646	573,382
Current Liabilities:
Accounts payable	80,674	99,247	70,573
Accrued expenses	49,196	43,773	43,160
Accrued bonus and benefits	1,609	2,290	4,708
Accrued income taxes	22,523	14,292	19,555
Total Current Liabilities	154,002	159,602	137,996
Deferred tax liabilities noncurrent	3,330	3,330	7,887
Other noncurrent liabilities (primarily deferred rent)	26,520	24,480	24,231
Commitments And Contingenciess	0	0	0
Stockholders' Equity:
Preferred stock, $100 par value per share, 100,000 shares authorized, none issued	0	0	0
Class of Stock [Line Items]
Common stock	975	976	976
Additional paid-in capital	78,356	76,594	73,863
Retained earnings	303,751	266,843	327,420
Accumulated other comprehensive income	479	821	1,009
Total Stockholders' Equity	383,561	345,234	403,268
Liabilities And Stockholders Equity	567,413	532,646	573,382
Common Class A [Member]
Class of Stock [Line Items]
Common stock	917	918	918
Common Class B [Member]
Class of Stock [Line Items]
Common stock	$ 58	$ 58	$ 58

XML

Reportable Segment Information - Notes to Financial Statements

3 Months Ended

Aug. 03, 2013

Reportable Segment Information [Abstract]

Reportable Segment Information

NOTE 5 – REPORTABLE SEGMENT INFORMATION:

The Company has determined that it has four operating segments, as defined under ASC 280-10, including Cato, It's Fashion, Versona Accessories and Credit. As outlined in ASC 280-10, the Company has two reportable segments: Retail and Credit. The Company has aggregated its retail operating segments based on the aggregation criteria outlined in ASC 280-10, which states that two or more operating segments may be aggregated into a single reportable segment if aggregation is consistent with the objective and basic principles of ASC 280-10, if the segments have similar economic characteristics, similar product, similar production processes, similar clients and similar methods of distribution.

The Company's retail operating segments have similar economic characteristics and similar operating, financial and competitive risks. They are similar in nature of product, as they all offer women's apparel, shoes and accessories. Merchandise inventory of the Company's operating segments is sourced from the same countries and some of the same vendors, using similar production processes. Clients of the Company's operating segments have similar characteristics. Merchandise for the Company's operating segments is distributed to retail stores in a similar manner through the Company's single distribution center and is subsequently distributed to clients in a similar manner, through its retail stores.

The Company operates its women's fashion specialty retail stores principally in the southeastern United States, and does business in 31 states total as of August 3, 2013. The Company offers its own credit card to its customers and all credit authorizations, payment processing and collection efforts are performed by a separate subsidiary of the Company.

NOTE 5 – REPORTABLE SEGMENT INFORMATION (CONTINUED):

The following schedule summarizes certain segment information (in thousands):

Three Months Ended				Six Months Ended
August 3, 2013	Retail	Credit	Total	August 3, 2013	Retail	Credit	Total
Revenues	$ 230,163	$ 1,555	$ 231,718	Revenues	$ 498,242	$ 3,174	$ 501,416
Depreciation	5,427	9	5,436	Depreciation	10,863	22	10,885
Interest and other income	(730)	-	(730)	Interest and other income	(1,605)	-	(1,605)
Income before taxes	22,474	623	23,097	Income before taxes	70,808	1,123	71,931
Total assets	501,281	66,132	567,413	Total assets	501,281	66,132	567,413
Capital expenditures	5,001	0	5,001	Capital expenditures	10,606	0	10,606
Three Months Ended				Six Months Ended
July 28, 2012	Retail	Credit	Total	July 28, 2012	Retail	Credit	Total
Revenues	$ 232,230	$ 1,833	$ 234,063	Revenues	$ 505,772	$ 3,635	$ 509,407
Depreciation	5,729	13	5,742	Depreciation	11,487	26	11,513
Interest and other income	(985)	-	(985)	Interest and other income	(1,891)	-	(1,891)
Income before taxes	26,747	880	27,627	Income before taxes	77,281	1,638	78,919
Total assets	495,526	77,856	573,382	Total assets	495,526	77,856	573,382
Capital expenditures	10,569	0	10,569	Capital expenditures	19,922	0	19,922

The Company evaluates segment performance based on income before taxes. The Company does not allocate certain corporate expenses or income taxes to the credit segment.

The following schedule summarizes the direct expenses of the credit segment which are reflected in selling, general and administrative expenses (in thousands):

	Three Months Ended				Six Months Ended
		August 3, 2013		July 28, 2012		August 3, 2013		July 28, 2012
Bad debt expense	$	314	$	293	$	696	$	596
Payroll		234		224		465		445
Postage		180		192		379		385
Other expenses		195		231		489		545
Total expenses	$	923	$	940	$	2,029	$	1,971

XML

General - Notes to Financial Statements - (Details) (USD $)	3 Months Ended		6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Aug. 03, 2013	Jul. 28, 2012
General Dsiclosure [Abstract]
Quarterly Declared Dividend	$ 0.05	$ 0.25	$ 0.10	$ 0.48
Accelerated 2013 Dividend	$ 1.00

XML

Sechedule Of Restricted Stock Outstanding - (Tables)

3 Months Ended

Aug. 03, 2013

[DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract]

Schedule Of Changes In Restricted Stock Outstanding

			Weighted Average
	Number of		Grant Date Fair
	Shares		Value Per Share
Restricted stock awards at February 2, 2013	440,146	$	23.70
Granted	214,385		23.57
Vested	(119,652)		19.85
Forfeited or expired	(23,212)		24.81
Restricted stock awards at August 3, 2013	511,667	$	24.49

XML

Changes in Accumulated Other Comprehensive Income Components - (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Aug. 03, 2013	Jul. 28, 2012
ReclassificationAdjustmentOutOfAccumulatedOtherComprehensiveIncomeLineItems
Income Tax Benefit (Expense)	$ 8,322	$ 10,294	$ 26,317	$ 29,864
Reclassified Accumulated Unrealized Gains and Losses
ReclassificationAdjustmentOutOfAccumulatedOtherComprehensiveIncomeLineItems
Interest and Other Income	28		94
Income Tax Benefit (Expense)	$ 11		$ 35

XML

Financing Arrangements - (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Feb. 02, 2013
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility Outstanding Borrowings	$ 556	$ 5,800	$ 2,900
Line of Credit Facility, Expiration Date	Aug. 22, 2015
RevolvingCreditFacilityMember [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	35,000
Line of Credit Facility Outstanding Borrowings	$ 0

XML

Supplemental Cash Flow Information - (Details) (USD $)	6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012
Supplemental Cash Flow Information Abstract Cato [Abstract]
Income Taxes Paid, Net	$ 18,171,000	$ 25,470,000

XML

Fair Value Measurements - Assets at Fairvalue - (Details) (USD $) In Thousands, unless otherwise specified	Aug. 03, 2013	Feb. 02, 2013	Jul. 28, 2012
Level 1 | Deferred Compensation
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OtherLiabilitiesFairValueDisclosure	$ 0	$ 0
Level 2 | Deferred Compensation
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OtherLiabilitiesFairValueDisclosure	0	0
Level 3 | Deferred Compensation
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OtherLiabilitiesFairValueDisclosure	(2,746)	(2,178)
State/Municipal Bonds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
State/Municipal Bonds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	158,080	151,377	176,206
State/Municipal Bonds | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
Corporate Bonds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure		0	0
Corporate Bonds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure		8,035	18,884
Corporate Bonds | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure		0	0
Auction Rate Securities (ARS) | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
Auction Rate Securities (ARS) | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
Auction Rate Securities (ARS) | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	3,450	3,450	3,450
Variable Rate Demand Notes (VDRN) | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure			16,865
Variable Rate Demand Notes (VDRN) | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure			0
Variable Rate Demand Notes (VDRN) | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure			0
US Treasury Notes | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	1,504	3,906	3,162
US Treasury Notes | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
US Treasury Notes | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
Corporate Equities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	591	474	439
Corporate Equities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
Corporate Equities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
Certificates of Deposit | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	100	100	101
Certificates of Deposit | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
Certificates of Deposit | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0	0
Privately Managed Funds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Alternative Investments, Fair Value Disclosure	0	0	0
Privately Managed Funds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Alternative Investments, Fair Value Disclosure	0	0	0
Privately Managed Funds | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Alternative Investments, Fair Value Disclosure	471	561	871
Cash Surrender Value - Life Insurance | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
CashSurrenderValueFairValueDisclosure	0	0	0
Cash Surrender Value - Life Insurance | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
CashSurrenderValueFairValueDisclosure	0	0	0
Cash Surrender Value - Life Insurance | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
CashSurrenderValueFairValueDisclosure	$ 2,633	$ 2,051	$ 0

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Sechedule Of Restricted Stock Outstanding - (Details) (2004 Plan, Restricted Stock, Class A Common Stock, USD $)	6 Months Ended
	Aug. 03, 2013
2004 Plan | Restricted Stock | Class A Common Stock
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested [Roll Forward]
Restricted Stock Awards Beginning Balance	440,146
Restricted Stock Awards Granted	214,385
Restricted Stock Awards Vested	(119,652)
Restricted Stock Awards Foreited	(23,212)
Restricted Stock Awards Ending Balance	511,667
Share Based Compensation Arrangement By Share Based Payment Award Equity InstrumentsOtherThan Options Nonvested Weighted Average Grant Date Fair Value
Restricted Stock Awards Weighted Average Grant Date Fair Value Per Share - Beginning Balance	$ 23.70
Granted Restricted Stock Awards Weighted Average Grant Date Fair Value Per Share	$ 23.57
Vested Restricted Stock Awards Weighted Average Grant Date Fair Value Per Share	$ 19.85
Forfeited Restricted Stock Awards Weighted Average Grant Date Fair Value Per Share	$ 24.81
Restricted Stock Awards Weighted Average Grant Date Fair Value Per Share - Ending Balance	$ 24.49

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Earnings Per Share - (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Aug. 03, 2013	Jul. 28, 2012
Earnings Per Share Disclosure [Abstract]
Net income	$ 14,775	$ 17,333	$ 45,614	$ 49,055
Earnings Alloacted to Non-Vesting Equity Awards	(251)	(267)	(733)	(764)
Net Income (Loss) Available to Common Stockholders	$ 14,524	$ 17,066	$ 44,881	$ 48,291
Basic Weighted-Average common shares outstanding	28,736,214	28,813,766	28,784,425	28,759,821
Dilutive Effect of Stock Options	4,859	4,285	3,537	4,231
Dilluted Weighted Average Common Shares Outstanding	28,741,073	28,818,051	28,787,962	28,764,052
Basic earnings per share	$ 0.51	$ 0.59	$ 1.56	$ 1.68
Diluted earnings per share	$ 0.51	$ 0.59	$ 1.56	$ 1.68

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012
OPERATING ACTIVITIES
Net income	$ 45,614	$ 49,055
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	10,885	11,513
Provision For Doubtful Accounts	696	596
Share Based Compensation	1,489	1,444
Excess tax benefits from share-based compensation	(28)	(98)
Loss on disposal of property and equipment	268	610
Changes in operating assets and liabilities which provided (used) cash:
Accounts receivable	(588)	(945)
Merchandise inventories	29,532	23,348
Prepaid and other assets	(3,419)	1,489
Accrued income taxes	8,259	4,509
Accounts payable, accrued expenses and other liabilities	(16,957)	(20,982)
Net cash provided by operating activities	75,751	70,539
INVESTING ACTIVITIES
Capital expenditures	(10,606)	(19,922)
Purchase of short-term investments	(11,756)	(100,289)
Sales of short-term investments	11,347	94,792
Change in restricted cash and investments	1,192	14
Net cash used in investing activities	(9,823)	(25,405)
FINANCING ACTIVITIES
Dividends paid	(2,939)	(14,027)
Repurchase of common stock	(5,780)	(355)
Proceeds from employee stock purchase plan	214	259
Excess tax benefits from share-based compensation financing activities	28	98
Proceeds From Stock Options Exercised	39	41
Net cash provided used in financing activities	(8,438)	(13,984)
Net increase in cash and cash equivalents	57,490	31,150
Cash and cash equivalents at beginning of period	31,069	34,893
Cash and cash equivalents at end of period	88,559	66,043
Change in Accrued PPE	$ (5,893)	$ 0

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Earnings Per Share - Notes to Financial Statements

3 Months Ended

Aug. 03, 2013

Earnings Per Share Disclosure [Abstract]

Earnings Per Share

NOTE 2 - EARNINGS PER SHARE:

ASC 260 – Earnings Per Share requires dual presentation of basic and diluted Earnings Per Share (“EPS”) on the face of all income statements for all entities with complex capital structures. The Company has presented one basic EPS and one diluted EPS amount for all common shares in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. While the Company's certificate of incorporation provides the right for the Board of Directors to declare dividends on Class A shares without declaration of commensurate dividends on Class B shares, the Company has historically paid the same dividends to both Class A and Class B shareholders and the Board of Directors has resolved to continue this practice. Accordingly, the Company's allocation of income for purposes of the EPS computation is the same for Class A and Class B shares and the EPS amounts reported herein are applicable to both Class A and Class B shares.

Basic EPS is computed as net income less earnings allocated to non-vested equity awards divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options and the Employee Stock Purchase Plan.

			Three Months Ended				Six Months Ended
			August 3, 2013		July 28, 2012		August 3, 2013		July 28, 2012
Numerator
	Net earnings	$	14,775	$	17,333	$	45,614	$	49,055
	Earnings allocated to non-vested equity awards		(251)		(267)		(733)		(764)
	Net earnings available to common stockholders	$	14,524	$	17,066	$	44,881	$	48,291
Denominator
	Basic weighted average common shares outstanding		28,736,214		28,813,766		28,784,425		28,759,821
	Dilutive effect of stock options		4,859		4,285		3,537		4,231
	Diluted weighted average common shares outstanding		28,741,073		28,818,051		28,787,962		28,764,052
Net income per common share
	Basic earnings per share	$	0.51	$	0.59	$	1.56	$	1.68
	Diluted earnings per share	$	0.51	$	0.59	$	1.56	$	1.68

XML

Stock Based Compensation - Notes to Financial Statements

3 Months Ended

Aug. 03, 2013

[DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract]

Stock Based Compensation

NOTE 6 – STOCK BASED COMPENSATION:

As of August 3, 2013, the Company had two long-term compensation plans pursuant to which stock-based compensation was outstanding or could be granted. The Company's 1987 Non-Qualified Stock Option Plan is for the granting of options to officers and key employees and the2013 Incentive Compensation Plan is for the granting of various forms of equity-based awards, including restricted stock and stock options for grant, to officers, directors and key employees. Effective May 23, 2013, shares for grant were no longer available under the 2004 Amended and Restated Incentive Compensation Plan.

The following table presents the number of options and shares of restricted stock initially authorized and available for grant under each of the plans as of August 3, 2013:

	1987	2004	2013
	Plan	Plan	Plan	Total
Options and/or restricted stock initially authorized	5,850,000	1,350,000	1,500,000	8,700,000
Options and/or restricted stock available for grant:
February 2, 2013	20,127	443,566	0	463,693
August 3, 2013	0	0	1,489,152	1,489,152

In accordance with ASC 718, the fair value of current restricted stock awards is estimated on the date of grant based on the market price of the Company's stock and is amortized to compensation expense on a straight-line basis over the related vesting periods. As of August 3, 2013,February 2, 2013 and July 28, 2012, there was $9.9million, $6.4 millionand $7.7million of total unrecognized compensation expense related to nonvested restricted stock awards, which have a remaining weighted-average vesting period of 4.5 years,2.3 years and 2.8 years, respectively. The total fair value of the shares recognized as compensation expense during the second quarter and six months ended August 3, 2013 was $1,018,000 and $1,448,000, respectively compared to $794,000 and $1,398,000, respectively for the second quarter and six months ended July 28, 2012. These expenses are classified as a component of selling, general and administrative expenses in the Condensed Consolidated Statements of Income.

The following summary shows the changes in the shares of restricted stock outstanding during the six months ended August 3, 2013:

			Weighted Average
	Number of		Grant Date Fair
	Shares		Value Per Share
Restricted stock awards at February 2, 2013	440,146	$	23.70
Granted	214,385		23.57
Vested	(119,652)		19.85
Forfeited or expired	(23,212)		24.81
Restricted stock awards at August 3, 2013	511,667	$	24.49

The Company's Employee Stock Purchase Plan allows eligible full-time employees to purchase a limited number of shares of the Company's Class A Common Stock during each semi-annual offering period at a 15% discount through payroll deductions. During the six months ended August 3, 2013 and July 28, 2012, the Company sold 10,418 and 11,687 shares to employees at an average discount of $3.62 and $3.92per share, respectively, under the Employee Stock Purchase Plan. The compensation expense recognized for the 15%discount given under the Employee Stock Purchase Plan was approximately $38,000 and $46,000 for the six months ended August 3, 2013 and July 28, 2012, respectively. These expenses are classified as a component of selling, general and administrative expenses.

The following is a summary of changes in stock options outstanding during the six months ended August 3, 2013.
				Weighted
			Weighted	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Shares		Price	Term		Value(a)
Options outstanding at February 2, 2013	9,550	$	13.47	2.12 years	$	136,185
Granted	20,127		23.57
Forfeited or expired	-
Exercised	(2,500)		14.09
Outstanding at August 3, 2013	27,177	$	20.89	7.41 years	$	131,922
Vested and exercisable at August 3, 2013	7,050	$	13.25	0.72 years	$	88,046

(a) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.

20,127 options were grantedin the first six months of fiscal 2013. No options were granted in the first six months of fiscal 2012.

The total intrinsic value of options exercised during the second quarter and six months ended August 3, 2013 was $17,000 and $27,000, respectively compared to $28,000 and $50,000, respectively, for the second quarter and six months ended July 28, 2012.

The stock option expensewas $5,000for the three andsix monthsended August 3, 2013 and zero for the three and six months ended July 28, 2012.

Stock option awards outstanding under the Company's current plans were granted at exercise prices which were equal to the market value of the Company's stock on the date of grant, vest over five years and expire no later than ten years after the grant date

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Supplemental Cash Flow Information - Notes to Financial Statements

3 Months Ended

Aug. 03, 2013

Supplemental Cash Flow Information Abstract Cato [Abstract]

Supplemental Cash Flow Information

NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION:

Income tax payments, net of refunds received, for the six months endedAugust 3, 2013 and July 28, 2012 were $18,171,000 and $25,470,000, respectively.

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Reportable Segment Information - (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Aug. 03, 2013	Jul. 28, 2012	Feb. 02, 2013
Segment Reporting Information [Line Items]
Total revenues	$ 231,718	$ 234,063	$ 501,416	$ 509,407
Depreciation	5,436	5,742	10,885	11,513
Interest and other income	730	985	1,605	1,891
Total Assets	567,413	573,382	567,413	573,382	532,646
Capital expenditures			10,606	19,922
Income Before Taxes	23,097	27,627	71,931	78,919
ReportableSegmentsMemberRetail [Member]
Segment Reporting Information [Line Items]
Total revenues	230,163	232,230	498,242	505,772
Depreciation	5,427	5,729	10,863	11,487
Interest and other income	(730)	(985)	1,605	(1,891)
Total Assets	501,281	495,526	501,281	495,526
Capital expenditures	5,001	10,569	10,606	19,922
Income Before Taxes	22,474	26,747	70,808	77,281
ReportableSegmentsMemberCredit [Member]
Segment Reporting Information [Line Items]
Total revenues	1,555	1,833	3,174	3,635
Depreciation	9	13	22	26
Interest and other income	0	0	0	0
Total Assets	66,132	77,856	66,132	77,856
Capital expenditures	0	0	0	0
Income Before Taxes	$ 623	$ 880	$ 1,123	$ 1,638

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Stock Based Compensation Additional - (Details) (USD $)	6 Months Ended		3 Months Ended		12 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Aug. 03, 2013 Restricted Stock Class A Common Stock	Jul. 28, 2012 Restricted Stock Class A Common Stock	Feb. 02, 2013 Restricted Stock Class A Common Stock	Aug. 03, 2013 Stock Options Class A Common Stock	Jul. 28, 2012 Stock Options Class A Common Stock	Aug. 03, 2013 Stock Options Class A Common Stock	Jul. 28, 2012 Stock Options Class A Common Stock	Aug. 03, 2013 Employee Stock Purchase Plan Class A Common Stock	Jul. 28, 2012 Employee Stock Purchase Plan Class A Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized Compensation Expense			$ 9,900,000	$ 7,700,000	$ 6,400,000
Remaining Weighted-Average Vesting Period			4 years 6 months 180 days	2 years 9 months 18 days	2 years 3 months 18 days
Shares Sold										10,418	11,687
Compensation Expense	1,448,000	1,398,000	1,018,000	794,000		5,000	0	5,000	0	38,000	46,000
Intrinsic Value						$ 17,000	$ 28,000	$ 27,000	$ 50,000
Options Granted						20,127	0	20,127	0
Employee Stock Purchase Plan Share Purchase Discount										$ 3.62	$ 3.92

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Changes in Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Aug. 03, 2013	Jul. 28, 2012
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance Accumulated other comprehensive income, net of tax			$ 821
Unrealized gain on available-for-sale securities, net of deferred income taxes	(453)	13	(342)	73
Ending Balance Accumulated other comprehensive income, net of tax	479	1,009	479	1,009
ChangeInUnrealizedGainsOnAvailableForSaleSecuritiesMember [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance Accumulated other comprehensive income, net of tax	932		821
Other Comprehensive Income Loss Before Reclassifications Net Of Tax	(436)		(283)
Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax	(17)		(59)
Unrealized gain on available-for-sale securities, net of deferred income taxes	(453)		(342)
Ending Balance Accumulated other comprehensive income, net of tax	$ 479		$ 479

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Condensed Consolidated Income Statements Of Income and Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Aug. 03, 2013	Jul. 28, 2012
OtherComprehensiveIncomeLossTaxParentheticalDisclosuresAbstract
Tax Effect of Unrealized Gains (Losses) On Available-For-Sale Securities	$ (273)	$ 8	$ (206)	$ 44

XML

Recent Accounting Pronouncements - Notes to Financial Statements

3 Months Ended

Aug. 03, 2013

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

During the first quarter of 2013, the Company adopted guidance that requires additional disclosures on reclassifications from accumulated other comprehensive income into net income. The new accounting guidance requires entities to report either parenthetically on the face of the financial statements or in the footnotes of these reclassifications for each financial statement line item. This new guidance only impacts disclosures and as such will have no impact on the Company's consolidated financial position, results of operations or cash flows.

During the first quarter of 2013, the Company adopted guidance that requires additional disclosures on reclassifications from accumulated other comprehensive income into net income. The new accounting guidance requires entities to report either parenthetically on the face of the financial statements or in the footnotes of these reclassifications for each financial statement line item. This new guidance only impacts disclosures and as such will have no impact on the Company's consolidated financial position, results of operations or cash flows.

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Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Aug. 03, 2013	Feb. 02, 2013	Jul. 28, 2012
Class of Stock [Line Items]
Allowance For Doubtful Accounts Receivable Current	$ 2,036	$ 2,053	$ 2,042
Preferred Stock Par Or Stated Value Per Share	$ 100	$ 100	$ 100
Preferred Stock Shares Authorized	100,000	100,000	100,000
Preferred Stock Shares Issued	0	0	0
Common Class B [Member]
Class of Stock [Line Items]
Common Stock Shares Authorized	15,000,000	15,000,000	15,000,000
Common Stock Shares Issued	1,743,525	1,743,525	1,743,525
Common Stock Par Or Stated Value Per Share	$ 0.033	$ 0.033	$ 0.033
Common Class A [Member]
Class of Stock [Line Items]
Common Stock Shares Authorized	50,000,000	50,000,000	50,000,000
Common Stock Shares Issued	27,510,139	27,543,376	27,530,131
Common Stock Par Or Stated Value Per Share	$ 0.033	$ 0.033	$ 0.033

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Condensed Consolidated Income Statements Of Income and Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Aug. 03, 2013	Jul. 28, 2012
Revenues
Retail sales	$ 229,378	$ 231,450	$ 496,559	$ 504,240
Other Revenue (principally finance charges, late fees and layaway charges)	2,340	2,613	4,857	5,167
Total revenues	231,718	234,063	501,416	509,407
COSTS AND EXPENSES, NET
Cost of goods sold (exclusive of depreciation shown below)	144,950	142,459	301,851	300,291
Selling, general and administrative (exclusive of depreciation shown below)	58,965	59,220	118,354	120,575
Depreciation	5,436	5,742	10,885	11,513
Interest and other income	730	985	1,605	1,891
Cost and expenses, net	208,621	206,436	429,485	430,488
Income before income taxes	23,097	27,627	71,931	78,919
Income tax expense	8,322	10,294	26,317	29,864
Net income	14,775	17,333	45,614	49,055
Basic earnings per share	$ 0.51	$ 0.59	$ 1.56	$ 1.68
Diluted earnings per share	$ 0.51	$ 0.59	$ 1.56	$ 1.68
Dividends per share	$ 0.05	$ 0.25	$ 0.10	$ 0.48
Comprehensive income
Net income	14,775	17,333	45,614	49,055
Unrealized gain on available-for-sale securities, net of deferred income taxes	(453)	13	(342)	73
Comprehensive Income	$ 14,322	$ 17,346	$ 45,272	$ 49,128

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Direct Expenses of Credit Segment in SGA - (Details) (ReportableSegmentsMemberCredit [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012	Aug. 03, 2013	Jul. 28, 2012
ReportableSegmentsMemberCredit [Member]
Direct Expenses Reflected in Selling, General and Administrative Expenses
Allowance for Loan and Lease Losses, Provision for Loss, Net	$ 314	$ 293	$ 696	$ 596
Labor and Related Expense	234	224	465	445
Postage Expense	180	192	379	385
Other Expenses	$ 195	$ 231	$ 489	$ 545

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Changes in Accumulated Other Comprehensive Income (Tables)

3 Months Ended

6 Months Ended

Aug. 03, 2013

Aug. 03, 2013

AccumulatedOtherComprehensiveIncomeLossDisclosure[Abstract]

Schedule Of Accumulated Other Comprehensive Income Loss Table Text Block

NOTE 8 – ACCUMULATED OTHER COMPREHENSIVE INCOME:

The following table sets forth information regarding the reclassification out of Accumulated other comprehensive income (in thousands) for the first three months of fiscal 2013:

	Changes in Accumulated Other
	Comprehensive Income (a)
			Unrealized Gains
			and (Losses) on
			Available-for-Sale
			Securities
Beginning Balance at May 4, 2013		$	932
Other comprehensive income before
reclassifications			(436)
Amounts reclassified from accumulated
other comprehensive income (b)			(17)
Net current-period other comprehensive income			(453)
Ending Balance at August 3, 2013		$	479
(a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reduction to OCI.
(b) Includes $28 impact of accumulated other comprehensive income reclassifications into Interest and other income for net gains on available-for-sale securities. The tax impact of this reclassification was $11.

The following table sets forth information regarding the reclassification out of Accumulated other comprehensive income (in thousands)for the first six months of fiscal 2013:

	Changes in Accumulated Other
	Comprehensive Income (a)
			Unrealized Gains
			and (Losses) on
			Available-for-Sale
			Securities
Beginning Balance at February 2, 2013		$	821
Other comprehensive income before
reclassifications			(283)
Amounts reclassified from accumulated
other comprehensive income (b)			(59)
Net current-period other comprehensive income			(342)
Ending Balance at August 3, 2013		$	479
(a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reduction to OCI.
(b) Includes $94 impact of accumulated other comprehensive income reclassifications into Interest and other income for net gains on available-for-sale securities. The tax impact of this reclassification was $35.

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Fair Value Measurements - Level 3 Roll - (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 03, 2013	Jul. 28, 2012
Deferred Compensation
FairValueLiabilitiesMeasuredOnRecurringBasisUnobservableInputReconciliationLineItems
Begining Balance	$ (2,178)
Additons	(425)
Losses (Gains) Included In Earnings	(143)
Ending Balance	(2,746)
Auction Rate Securities (ARS)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	3,450	3,450
Redemptions	0	0
Additions	0
Gains (Losses) Included in Earnings	0	0
Gains (Losses) Included in Other Comprehensive Income	0	0
Ending Balance	3,450	3,450
Privately Managed Funds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	561	1,604
Redemptions	(97)	722
Additions	0
Gains (Losses) Included in Earnings	(7)	11
Gains (Losses) Included in Other Comprehensive Income	0	0
Ending Balance	471	871
Cash Surrender Value - Life Insurance
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	2,051
Redemptions	0
Additions	494
Gains (Losses) Included in Earnings	(88)
Gains (Losses) Included in Other Comprehensive Income	0
Ending Balance	$ 2,633

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Fair Value Level 3 Inputs - (Details) (Discounted Cash Flow Analysis, Level 3)	3 Months Ended
	Aug. 03, 2013	Jul. 28, 2012
Fair Value Inputs Assets Quantitative Information [Line Items]
Total Term	9 years 1 month 6 days
Auction Rate Securities (ARS)
Fair Value Inputs Assets Quantitative Information [Line Items]
Total Term	9 years 1 month 6 days	10 years 1 month 6 days
Comparitive Bond Discount Rate	0.19%	0.20%
ARS Yield	0.105%	0.28%

XML

Accumulated Other Comprehensive Income

3 Months Ended

6 Months Ended

Aug. 03, 2013

Aug. 03, 2013

AccumulatedOtherComprehensiveIncomeLossDisclosure[Abstract]

Accumulated Other Comprehensive Income (Loss)

NOTE 8 – ACCUMULATED OTHER COMPREHENSIVE INCOME:

The following table sets forth information regarding the reclassification out of Accumulated other comprehensive income (in thousands) for the first three months of fiscal 2013:

	Changes in Accumulated Other
	Comprehensive Income (a)
			Unrealized Gains
			and (Losses) on
			Available-for-Sale
			Securities
Beginning Balance at May 4, 2013		$	932
Other comprehensive income before
reclassifications			(436)
Amounts reclassified from accumulated
other comprehensive income (b)			(17)
Net current-period other comprehensive income			(453)
Ending Balance at August 3, 2013		$	479
(a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reduction to OCI.
(b) Includes $28 impact of accumulated other comprehensive income reclassifications into Interest and other income for net gains on available-for-sale securities. The tax impact of this reclassification was $11.

The following table sets forth information regarding the reclassification out of Accumulated other comprehensive income (in thousands)for the first six months of fiscal 2013:

	Changes in Accumulated Other
	Comprehensive Income (a)
			Unrealized Gains
			and (Losses) on
			Available-for-Sale
			Securities
Beginning Balance at February 2, 2013		$	821
Other comprehensive income before
reclassifications			(283)
Amounts reclassified from accumulated
other comprehensive income (b)			(59)
Net current-period other comprehensive income			(342)
Ending Balance at August 3, 2013		$	479
(a) All amounts are net-of-tax. Amounts in parentheses indicate a debit/reduction to OCI.
(b) Includes $94 impact of accumulated other comprehensive income reclassifications into Interest and other income for net gains on available-for-sale securities. The tax impact of this reclassification was $35.

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Stock Based Compensation - Plans - (Details)	Aug. 03, 2013	Feb. 02, 2013
1987 Plan
Restricted Shares Authorized And Available For Grant
Options And/Or Restrcited Stock Initially Authorized	5,850,000
Options And Or Restricted Stock Available For Grant	0	20,127
2004 Plan
Restricted Shares Authorized And Available For Grant
Options And/Or Restrcited Stock Initially Authorized	1,350,000
Options And Or Restricted Stock Available For Grant	0	443,566
2013 Plan
Restricted Shares Authorized And Available For Grant
Options And/Or Restrcited Stock Initially Authorized	1,500,000
Options And Or Restricted Stock Available For Grant	1,489,152	0

XML

Reportable Segment Information - (Tables)

3 Months Ended

Aug. 03, 2013

Reportable Segment Information [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Three Months Ended				Six Months Ended
August 3, 2013	Retail	Credit	Total	August 3, 2013	Retail	Credit	Total
Revenues	$ 230,163	$ 1,555	$ 231,718	Revenues	$ 498,242	$ 3,174	$ 501,416
Depreciation	5,427	9	5,436	Depreciation	10,863	22	10,885
Interest and other income	(730)	-	(730)	Interest and other income	(1,605)	-	(1,605)
Income before taxes	22,474	623	23,097	Income before taxes	70,808	1,123	71,931
Total assets	501,281	66,132	567,413	Total assets	501,281	66,132	567,413
Capital expenditures	5,001	0	5,001	Capital expenditures	10,606	0	10,606
Three Months Ended				Six Months Ended
July 28, 2012	Retail	Credit	Total	July 28, 2012	Retail	Credit	Total
Revenues	$ 232,230	$ 1,833	$ 234,063	Revenues	$ 505,772	$ 3,635	$ 509,407
Depreciation	5,729	13	5,742	Depreciation	11,487	26	11,513
Interest and other income	(985)	-	(985)	Interest and other income	(1,891)	-	(1,891)
Income before taxes	26,747	880	27,627	Income before taxes	77,281	1,638	78,919
Total assets	495,526	77,856	573,382	Total assets	495,526	77,856	573,382
Capital expenditures	10,569	0	10,569	Capital expenditures	19,922	0	19,922

	Three Months Ended				Six Months Ended
		August 3, 2013		July 28, 2012		August 3, 2013		July 28, 2012
Bad debt expense	$	314	$	293	$	696	$	596
Payroll		234		224		465		445
Postage		180		192		379		385
Other expenses		195		231		489		545
Total expenses	$	923	$	940	$	2,029	$	1,971

XML

Fair Value Measurements - Notes to Financial Statements

3 Months Ended

12 Months Ended

Aug. 03, 2013

Feb. 02, 2013

Fair Value Measurements [Abstract]

Fair Value Disclosures Text Block

NOTE 7 – FAIR VALUE MEASUREMENTS:

The following tables set forth information regarding the Company's financial assets that are measured at fair value (in thousands) as of August 3, 2013, February 2, 2013 and July 28, 2012.

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		August 3, 2013	Assets		Inputs		Inputs
Description			Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	158,080	$	-	$	158,080	$	-
Auction Rate Securities (ARS)		3,450		-		-		3,450
U.S. Treasury Notes		1,504		1,504		-		-
Cash Surrender Value of Life Insurance		2,633		-		-		2,633
Privately Managed Funds		471		-		-		471
Corporate Equities		591		591		-		-
Certificates of Deposit		100		100		-		-
Total Assets	$	166,829	$	2,195	$	158,080	$	6,554
Liabilities:
Deferred Compensation		(2,746)		-		-		(2,746)
Total Liabilities	$	(2,746)	$	-	$	-	$	(2,746)

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		July 28, 2012	Assets		Inputs		Inputs
Description			Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	176,206	$	-	$	176,206	$	-
Corporate Bonds		18,884		-		18,884		-
Auction Rate Securities (ARS)		3,450		-		-		3,450
Variable Rate Demand Notes (VRDN)		16,865		16,865		-		-
U.S. Treasury Notes		3,162		3,162		-		-
Privately Managed Funds		871		-		-		871
Corporate Equities		439		439		-		-
Certificates of Deposit		101		101		-		-
Total Assets	$	219,978	$	20,567	$	195,090	$	4,321

The Company's investment portfolio was primarily invested in corporate bonds and tax-exempt and taxable governmental debt securities held in managed accounts with underlying ratings of A or better at August 3, 2013, February 2, 2013 and July 28, 2012. These securities are classified as available-for-sale and are recorded as Short-term investments, Restricted investments and Other assets on the accompanying Condensed Consolidated Balance Sheets. These assets are carried at fair value with unrealized gains and losses reported net of taxes in Accumulated other comprehensive income.

Additionally, at August 3, 2013, the Company had $0.5 million of privately managed funds, $0.6 million of corporate equities and a single auction rate security (“ARS”) of $3.5 million which continues to fail its auction, and deferred compensation plan assets of $2.6 million. At February 2, 2013, the Company had $0.6million of privately managed funds, $0.5million of corporate equities, a single ARS of $3.5 millionand deferred compensation plan assets of $2.1 million. At July 28, 2012, the Company had $0.9 million of privately managed funds, $0.4 million of corporate equities anda single ARS of $3.5 million. All of these assets are recorded within Other assets in the Condensed Consolidated Balance Sheets.

Level 1 category securities are measured at fair value using quoted active market prices. Level 2 investment securities include corporate and municipal bonds for which quoted prices may not be available on active exchanges for identical instruments. Their fair value is principally based on market values determined by management with assistance of a third party pricing service. Since quoted prices in active markets for identical assets are not available, these prices are determined by the pricing service using observable market information such as quotes from less active markets and/or quoted prices of securities with similar characteristics, among other factors.

The ARS of $3,450,000 par value was issued by the Wake County, NC Industrial Facilities & Pollution Control Financing Authority. The security is an obligation of Carolina Power & Light Company and has a credit rating of AAA. The Company has collected all interest payments when due since the security was purchased and continues to expect that it will receive all interest due on the security in full and on a timely basis in the future.

The Company's failed ARS is recorded at par value which approximates fair value using Level 3 inputs at each reporting period. Because there is no active market for this particular ARS, its fair value was determined to approximate par value based on an estimate of fair value through the use of a discounted cash flow analysis. The terms used in the analysis were based on management's estimate of the timing of future liquidity, which assumes that the security will be called or refinanced by the issuer or settled with a broker dealer prior to maturity. The discount rates used in the discounted cash flow analysis were based on market rates for similar liquid tax exempt securities with comparable ratings and maturities. Due to the uncertainty surrounding the timing of future liquidity, the Company also considered a liquidity/risk value reduction. In estimating the fair value of this ARS, the Company also considered the financial condition and near-term prospects of the issuer, the probability that the Company will be unable to collect all amounts due according to the contractual terms of the security and whether the security has been downgraded by a rating agency. The Company's valuation is sensitive to market conditions and management's judgment and can change significantly based on the assumptions used.

The Company's privately managed funds consist of two types of funds. The privately managed funds cannot be redeemed at net asset value at a specific date without advance notice. As a result, the Company has classified the investments as Level 3.

Deferred compensation plan assets consist of life insurance policies. These life insurance policies are valued based on the cash surrender value of the insurance contract, which is determined based on such factors as the fair value of the underlying assets and discounted cash flow and are therefore classified within level 3 of the valuation hierarchy. The level 3 liability associated with the life insurance policies represents a deferred compensation obligation, the value of which is tracked via underlying insurance funds. These funds are designed to mirror existing mutual funds and money market funds that are observable and actively traded. Cash surrender values are provided by third parties and reviewed for reasonableness by the Company.

The following tables summarize the change in fair value of the Company's financial assets measured using Level 3 inputs as of August 3, 2013 and July 28, 2012 (dollars in thousands):

		Fair Value Measurements Using Significant
		Unobservable Asset Inputs (Level 3)
	Available-For-Sale					Cash
	Debt Securities		Other Investments			Surrender
	ARS		Private Equity			Value	Total
Beginning Balance at February 2, 2013	$	3,450	$	561	$	2,051	$	6,062
Redemptions		-		(97)		-		(97)
Additions		-		-		494		494
Total gains or (losses)
Included in earnings (or changes in net assets)		-		7		88		95
Included in other comprehensive income		-		-		-		-
Ending Balance at August 3, 2013	$	3,450	$	471	$	2,633	$	6,554
	Fair Value Measurements Using Significant
	Unobservable Liability Inputs (Level 3)
	Deferred
	Compensation			Total
Beginning Balance at February 2, 2013	$	(2,178)	$	(2,178)
Additions		(425)		(425)
Total (gains) or losses
Included in earnings (or changes in net assets)		(143)		(143)
Included in other comprehensive income		-		-
Ending Balance at August 3, 2013	$	(2,746)	$	(2,746)
	Fair Value Measurements Using Significant
	Unobservable Asset Inputs (Level 3)
	Available-For-Sale
	Debt Securities		Other Investments
	ARS		Private Equity			Total
Beginning Balance at January 28, 2012	$	3,450	$	1,604	$	5,054
Redemptions		-		(722)		(722)
Assets
Total gains or (losses)
Included in earnings (or changes in net assets)		-		(11)		(11)
Included in other comprehensive income		-		-		-
Ending Balance at July 28, 2012	$	3,450	$	871	$	4,321

Quantitative information regarding the significant unobservable inputs related to the ARS as of August 3, 2013 and July 28, 2012 were as follows:
As of August 3, 2013
Fair Value	Valuation Technique	Unobservable Inputs
$3,450	Net present value	Total Term	9.1 Years
	of cash flows	Yield	0.11%
		Comparative bond discount rate	0.19%
As of July 28, 2012
Fair Value	Valuation Technique	Unobservable Inputs
$3,450	Net present value	Total Term	10.1 Years
	of cash flows	Yield	0.28%
		Comparative bond discount rate	0.20%
Significant increases or decreases in certain of the inputs could result in a lower fair value measurement. For example, a decrease in the yield, or an increase to the comparative bond discount rate could result in a lower fair value.

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		February 2, 2013	Assets		Inputs		Inputs
Description			Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	151,377	$	-	$	151,377	$	-
Corporate Bonds		8,035		-		8,035		-
Auction Rate Securities (ARS)		3,450		-		-		3,450
U.S. Treasury Notes		3,906		3,906		-		-
Cash Surrender Value of Life Insurance		2,051		-		-		2,051
Privately Managed Funds		561		-		-		561
Corporate Equities		474		474		-		-
Certificates of Deposit		100		100		-		-
Total Assets	$	169,954	$	4,480	$	159,412	$	6,062
Liabilities:
Deferred Compensation		(2,178)		-		-		(2,178)
Total Liabilities	$	(2,178)	$	-	$	-	$	(2,178)

XML

General - Notes to Financial Statements

3 Months Ended

Aug. 03, 2013

General Dsiclosure [Abstract]

Summary of Significant Account Policies

NOTE 1 - GENERAL:

The condensed consolidated financial statements have been prepared from the accounting records of The Cato Corporation and its wholly-owned subsidiaries (the “Company”), and all amounts shown as of and for thethree and six month periods ended August 3, 2013 and July 28, 2012 are unaudited. In the opinion of management, all adjustments considered necessary for a fair statement have been included. All such adjustments are of a normal, recurring nature unless otherwise noted. The results of the interim period may not be indicative of the results expected for the entire year.

The interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended February 2, 2013. Amounts as of February 2, 2013, have been derived from the audited balance sheet, but do not include all disclosures required by accounting principles generally accepted in the United States of America.

On August 29, 2013, the Board of Directors maintained the quarterly dividend at $0.05 per share. The Board of Directors previously accelerated the full fiscal year 2013 dividend of $1.00 on December 28,2012.

XML

Weighted Average Option Rollforward - (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended	12 Months Ended
	Aug. 03, 2013	Aug. 03, 2013	Feb. 02, 2013
shareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingRollForward
Options Outstanding	27,177	27,177	9,550
Amount of Vested Exercisable Options	7,050	7,050
Stock Options [Member]
shareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingRollForward
Granted		20,127
Forfeited or expired		0
Exercised		(2,500)
Weighted Average Exercise Price for Vested and Exercisable Options	$ 13.25	$ 13.25
Weighted Average Remaining Contractual Term for Vested and Exercisable Options	0 years 8 months 12 days
Weighted Average Exercise Price Granted		$ 23.57
Average Intrinsic Value for Vested and Exercisable Options	$ 88,046	$ 88,046
Weighted Average Contractual Term for Options Outstanding	7 years 4 months 24 days		2 years 1 month 6 days
Average Intrinsic Value for Options Outstanding	$ 131,922	$ 131,922	$ 136,185
Weighted Average Exercise Price Exercised		$ 14.09
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePriceRollforward
Options Outstanding		$ 13.47
Options Outstanding	$ 20.89	$ 20.89	$ 13.47

XML

Stock Option Changes - (Tables)

6 Months Ended

Aug. 03, 2013

[DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract]

Schedule of Stock Options Outstanding

The following is a summary of changes in stock options outstanding during the six months ended August 3, 2013.
				Weighted
			Weighted	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Shares		Price	Term		Value(a)
Options outstanding at February 2, 2013	9,550	$	13.47	2.12 years	$	136,185
Granted	20,127		23.57
Forfeited or expired	-
Exercised	(2,500)		14.09
Outstanding at August 3, 2013	27,177	$	20.89	7.41 years	$	131,922
Vested and exercisable at August 3, 2013	7,050	$	13.25	0.72 years	$	88,046

XML

Earnings Per Share - (Tables)

3 Months Ended

Aug. 03, 2013

Earnings Per Share Disclosure [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

			Three Months Ended				Six Months Ended
			August 3, 2013		July 28, 2012		August 3, 2013		July 28, 2012
Numerator
	Net earnings	$	14,775	$	17,333	$	45,614	$	49,055
	Earnings allocated to non-vested equity awards		(251)		(267)		(733)		(764)
	Net earnings available to common stockholders	$	14,524	$	17,066	$	44,881	$	48,291
Denominator
	Basic weighted average common shares outstanding		28,736,214		28,813,766		28,784,425		28,759,821
	Dilutive effect of stock options		4,859		4,285		3,537		4,231
	Diluted weighted average common shares outstanding		28,741,073		28,818,051		28,787,962		28,764,052
Net income per common share
	Basic earnings per share	$	0.51	$	0.59	$	1.56	$	1.68
	Diluted earnings per share	$	0.51	$	0.59	$	1.56	$	1.68

XML

Fair Value Level 3 Inputs (Tables)

3 Months Ended

Aug. 03, 2013

Fair Value Inputs Quantitative Information [Abstract]

Fair Value Level 3 Inputs

Quantitative information regarding the significant unobservable inputs related to the ARS as of August 3, 2013 and July 28, 2012 were as follows:
As of August 3, 2013
Fair Value	Valuation Technique	Unobservable Inputs
$3,450	Net present value	Total Term	9.1 Years
	of cash flows	Yield	0.11%
		Comparative bond discount rate	0.19%
As of July 28, 2012
Fair Value	Valuation Technique	Unobservable Inputs
$3,450	Net present value	Total Term	10.1 Years
	of cash flows	Yield	0.28%
		Comparative bond discount rate	0.20%
Significant increases or decreases in certain of the inputs could result in a lower fair value measurement. For example, a decrease in the yield, or an increase to the comparative bond discount rate could result in a lower fair value.

XML

Fair Value Measurements - Assets at Fairvalue - (Tables)

3 Months Ended

12 Months Ended

Aug. 03, 2013

Feb. 02, 2013

Fair Value Measurements [Abstract]

Fair Value Disclosures

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		August 3, 2013	Assets		Inputs		Inputs
Description			Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	158,080	$	-	$	158,080	$	-
Auction Rate Securities (ARS)		3,450		-		-		3,450
U.S. Treasury Notes		1,504		1,504		-		-
Cash Surrender Value of Life Insurance		2,633		-		-		2,633
Privately Managed Funds		471		-		-		471
Corporate Equities		591		591		-		-
Certificates of Deposit		100		100		-		-
Total Assets	$	166,829	$	2,195	$	158,080	$	6,554
Liabilities:
Deferred Compensation		(2,746)		-		-		(2,746)
Total Liabilities	$	(2,746)	$	-	$	-	$	(2,746)

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		July 28, 2012	Assets		Inputs		Inputs
Description			Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	176,206	$	-	$	176,206	$	-
Corporate Bonds		18,884		-		18,884		-
Auction Rate Securities (ARS)		3,450		-		-		3,450
Variable Rate Demand Notes (VRDN)		16,865		16,865		-		-
U.S. Treasury Notes		3,162		3,162		-		-
Privately Managed Funds		871		-		-		871
Corporate Equities		439		439		-		-
Certificates of Deposit		101		101		-		-
Total Assets	$	219,978	$	20,567	$	195,090	$	4,321

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		February 2, 2013	Assets		Inputs		Inputs
Description			Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	151,377	$	-	$	151,377	$	-
Corporate Bonds		8,035		-		8,035		-
Auction Rate Securities (ARS)		3,450		-		-		3,450
U.S. Treasury Notes		3,906		3,906		-		-
Cash Surrender Value of Life Insurance		2,051		-		-		2,051
Privately Managed Funds		561		-		-		561
Corporate Equities		474		474		-		-
Certificates of Deposit		100		100		-		-
Total Assets	$	169,954	$	4,480	$	159,412	$	6,062
Liabilities:
Deferred Compensation		(2,178)		-		-		(2,178)
Total Liabilities	$	(2,178)	$	-	$	-	$	(2,178)

XML

Document and Entity Information (USD $)	3 Months Ended
	Aug. 03, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	Cato Corp
Entity Central Index Key	0000018255
Document Type	10-Q
Document Period End Date	Aug. 03, 2013
Amendment Flag	false
Current Fiscal Year End Date	--08-03
Entity Well Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Class of Stock [Line Items]
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Public Float	$ 780,410,915
Common Class A [Member]
Class of Stock [Line Items]
Entity Common Stock, Shares Outstanding (actual number)	27,510,139
Common Class B [Member]
Class of Stock [Line Items]
Entity Common Stock, Shares Outstanding (actual number)	1,743,525

XML

Fair Value Measurments - Level 3 Roll (Tables)

3 Months Ended

Aug. 03, 2013

Fair Value Measurements [Abstract]

Level 3 Reconciliation

		Fair Value Measurements Using Significant
		Unobservable Asset Inputs (Level 3)
	Available-For-Sale					Cash
	Debt Securities		Other Investments			Surrender
	ARS		Private Equity			Value	Total
Beginning Balance at February 2, 2013	$	3,450	$	561	$	2,051	$	6,062
Redemptions		-		(97)		-		(97)
Additions		-		-		494		494
Total gains or (losses)
Included in earnings (or changes in net assets)		-		7		88		95
Included in other comprehensive income		-		-		-		-
Ending Balance at August 3, 2013	$	3,450	$	471	$	2,633	$	6,554
	Fair Value Measurements Using Significant
	Unobservable Liability Inputs (Level 3)
	Deferred
	Compensation			Total
Beginning Balance at February 2, 2013	$	(2,178)	$	(2,178)
Additions		(425)		(425)
Total (gains) or losses
Included in earnings (or changes in net assets)		(143)		(143)
Included in other comprehensive income		-		-
Ending Balance at August 3, 2013	$	(2,746)	$	(2,746)
	Fair Value Measurements Using Significant
	Unobservable Asset Inputs (Level 3)
	Available-For-Sale
	Debt Securities		Other Investments
	ARS		Private Equity			Total
Beginning Balance at January 28, 2012	$	3,450	$	1,604	$	5,054
Redemptions		-		(722)		(722)
Assets
Total gains or (losses)
Included in earnings (or changes in net assets)		-		(11)		(11)
Included in other comprehensive income		-		-		-
Ending Balance at July 28, 2012	$	3,450	$	871	$	4,321