Cato Anticipates Lower 2008 Earnings

The specialty retailer forecast 2008 net income between $21 million and $27 million, or 72 cents to 93 cents per share. Cato reported 2007 profit of $32.3 million, or $1.03 per share.

The 2008 estimate sees same-store sales flat to down 3 percent.

Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

Cato believes 2008 will be a hard time for retailers. The sector, along with many other industries, has struggled as consumers curb spending due to the ongoing housing downturn, credit constraints, rising gas costs and recession worries.

The company predicts fiscal first-quarter net income between $14.4 million and $16.2 million, or 49 cents to 55 cents per share.

Cato reported a 2007 first-quarter profit of $18.7 million, or 59 cents per share.

The company operated 1,318 stores in 32 states as of Feb. 2.