EX-99.1

Exhibit 99.1

The CATO Corporation


FOR IMMEDIATE RELEASE		NEWS RELEASE

		CEO Approval
For Further Information Contact: John R. Howe Executive Vice President Chief Financial Officer 704-551-7315

CATO REPORTS NET INCOME AND EPS FOR 4Q AND 2008
Provides 2009 Outlook

Charlotte, NC (March 19, 2009) — The Cato Corporation (NYSE: CTR) today reported net income for the fourth quarter and year ended January 31, 2009. For the fourth quarter, the Company reported net income of $3.9 million or $.13 per diluted share compared to a loss of $1.8 million or ($.06) per diluted share for the fourth quarter ended February 2, 2008. Full year 2008 net income was $33.6 million or $1.15 per diluted share compared to $32.3 million or $1.03 per diluted share for 2007. For the year, net income increased 4% over the prior year and earnings per diluted share increased 12%.

Sales for fiscal fourth quarter ended January 31, 2009 were $209.1 million, flat to sales of $209.4 million for the fourth quarter ended February 2, 2008. For the quarter, comparable store sales decreased 3%. The Company’s sales for 2008 were $845.7 million as compared to 2007 sales of $834.3 million, a 1% increase. For the year, comparable store sales decreased 1%.

“We are pleased with our 2008 results given the difficult environment,” said John Cato, Chairman, President and Chief Executive Officer. “We were able to manage our inventory and control costs throughout the year, increasing net income and EPS while closing 102 stores.”

2008 REVIEW

For 2008, gross margin increased 210 basis points to 33.5% of sales due to higher merchandise

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

margin as a result of lower markdowns. Selling, general and administrative expenses increased 160 basis points to 26.9% of sales primarily due to the costs associated with store closings and higher bad debt expenses, insurance costs and incentive compensation. The Company’s effective income tax rate increased to 36.1% from 34.4% last year primarily due to lower tax-exempt interest and higher state taxes. Net income was 4.0% of sales vs. 3.9 % last year.

“The Company’s balance sheet remains strong with over $140 million in cash and short-term investments and no debt. Also, inventory remains lower on an average in-store basis than last year,” commented Mr. Cato. During 2008, the Company returned $19.4 million in dividends to shareholders. The Company’s annualized dividend of $.66 per share represents a yield of approximately 4.0% based on the March 18 closing price of $16.58.

For the fiscal year ended January 31, 2009, the Company opened 65 stores, relocated nine stores
and closed 102 stores.

2009 OUTLOOK

The Company expects the difficult economic environment to continue in 2009 and believes its current inventory position is fresh and in line with current sales expectations. The gross margin rate is expected to increase slightly to 33.6%. The Company estimates comparable store sales in a range of down 3% to flat resulting in a net income range of $28.8 million to $34.7 million. The Company estimates earnings per diluted share will be in a range of $.98 to $1.17, a decrease of 14% to an increase of 3% over 2008 (the percentage changes reflect the restatement of 2008 earnings per diluted share to $1.14 under EITF 03-6-1).

The Company estimates first quarter net income to be in a range of $14.4 million to $16.0 million, or $.49 to $.54 per diluted share, a decrease of 14% to 5% (the percentage change for the first quarter estimates reflect restatement of first quarter 2008 earnings per diluted share to $.57 under EITF 03-6-1). This estimate is based on comparable store sales of down 3% to flat.

The Company’s net income estimates for 2009 also reflect the following items:

The Company expects to open 55 new stores during 2009. The expected store openings include 15 new Cato stores and 40 new It’s Fashion Metro stores (including the conversion

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

of approximately 20 existing It’s Fashion stores).

	•		The Company anticipates closing up to 25 stores by year end, excluding the 20 conversions mentioned above. At this time, no specific stores have been identified for closure.

	•		Capital expenditures are projected to be approximately $18 million, including $12 million for store development.

	•		Depreciation is expected to be approximately $23 million for the year.

	•		The effective tax rate is expected to be approximately 34.4%.

The Cato Corporation is a leading specialty retailer of value-priced women’s fashion apparel operating two divisions, “Cato” and “It’s Fashion”. The Cato division offers exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices every day. The It’s Fashion division offers fashion with a focus on the latest trendy styles and nationally recognized urban brands for the entire family at low prices every day. As of February 28, 2009, the Company operated 1,282 stores in 31 states, compared to 1,321 stores in 32 states as of March 1, 2008. Additional information on The Cato Corporation is available at www.catocorp.com.

Statements in this press release not historical in nature including, without limitation, statements regarding the Company’s expected financial results for fiscal 2009 and the first quarter of 2009, including various components of net income, comparable store sales, expected capital expenditures, and store openings and closings are considered “forward-looking” within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the forward-looking statements. Such factors include, but are not limited to, the following: general economic conditions; competitive factors and pricing pressures; the Company’s ability to predict fashion trends; consumer apparel buying patterns; adverse weather conditions, and inventory risks due to shifts in market demand, as well as such other factors and considerations contained in the Company’s Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. The Company does not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any changes made to this press release by wire or internet services.

# # #

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

THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED JANUARY 31, 2009 AND FEBRUARY 2, 2008
(Dollars in thousands, except per share data)


				Quarter Ended												Twelve Months Ended
	January 31,			%			February 2,			%			January 31,			%			February 2,			%
	2009			Sales			2008			Sales			2009			Sales			2008			Sales

REVENUES
Retail sales	$	209,091			100.0	%	$	209,364			100.0	%	$	845,676			100.0	%	$	834,341			100.0	%
Other income (principally finance, late fees and layaway charges)		3,147			1.5	%		3,072			1.5	%		12,042			1.4	%		12,096			1.5	%


Total revenues		212,238			101.5	%		212,436			101.5	%		857,718			101.4	%		846,437			101.5	%


GROSS MARGIN (Memo)		63,846			30.5	%		54,070			25.8	%		283,620			33.5	%		262,032			31.4	%

COSTS AND EXPENSES, NET
Cost of goods sold		145,245			69.5	%		155,294			74.2	%		562,056			66.5	%		572,309			68.6	%
Selling, general and administrative		56,894			27.2	%		55,999			26.8	%		227,698			26.9	%		210,901			25.3	%
Depreciation		5,691			2.7	%		5,514			2.6	%		22,572			2.7	%		22,212			2.7	%
Interest and other income		(1,426	)		-0.7	%		(1,833	)		-0.9	%		(7,218	)		-0.9	%		(8,218	)		-1.0	%


Cost and expenses, net		206,404			98.7	%		214,974			102.7	%		805,108			95.2	%		797,204			95.6	%


Income Before Income Taxes		5,834			2.8	%		(2,538	)		-1.2	%		52,610			6.2	%		49,233			5.9	%

Income Tax Expense		1,968			0.9	%		(740	)		-0.3	%		18,976			2.2	%		16,914			2.0	%


Net Income	$	3,866			1.8	%	$	(1,798	)		-0.9	%	$	33,634			4.0	%	$	32,319			3.9	%


Basic Earnings Per Share	$	0.13					$	(0.06	)				$	1.16					$	1.03


Basic Weighted Average Shares		28,945,317						29,978,405						29,065,594						31,279,918


Diluted Earnings Per Share	$	0.13					$	(0.06	)				$	1.15					$	1.03


Diluted Weighted Average Shares		29,044,146						29,978,405						29,151,759						31,513,202

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


	January 31,		February 2,
	2009		2008
	(Unaudited)

ASSETS
Current Assets
Cash and cash equivalents	$	42,262	$	21,583
Short-term investments		102,324		92,995
Accounts receivable — net		44,136		45,282
Merchandise inventories		112,290		118,679
Other current assets		14,140		14,511


Total Current Assets		315,152		293,050

Property and Equipment — net		116,262		123,190

Other Assets		3,939		4,552


TOTAL	$	435,353	$	420,792

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities	$	150,804	$	148,936

Noncurrent Liabilities		22,811		24,486

Stockholders’ Equity		261,738		247,370


TOTAL	$	435,353	$	420,792