Cato Corporation (NYSE: CTR) retails women's fashions. It offers an assortment of apparel and accessories, including sportswear, dresses, coats, shoes, lingerie, costume jewelry and handbags. The company operates over 1,300 retail stores under the names Cato, Cato Fashions, Cato Plus, It's Fashion! and It's Fashion Metro, in 31 states. The stores are located primarily in strip shopping centers anchored by national discounters, or market-dominant grocery stores.

The firm surprised the Street last week, when it boosted its Q2 EPS guidance from 28-33 cents to 42-44 cents. Analysts had been expecting 30 cents. Management also announced that June same store sales were up 4.0% (yr/yr). That also topped the analyst view (+2.3%).

High quality at reasonable prices has been a successful formula for a Charlotte ladies' clothing firm that even publishes its own fashion magazine.

Cato Corporation (NYSE: CTR) operates women's fashion specialty retail stores in the southeastern United States. It offers an assortment of apparel and accessories, including sportswear, dresses, coats, shoes, lingerie, costume jewelry, and handbags. The company operates 1,301 retail stores under the names Cato, It's Fashion!, Cato Fashions and Cato Plus. The stores are located primarily in strip shopping centers anchored by national discounters, or market-dominant grocery stores.

The firm surprised the Street last week, when it boosted its Q2 EPS guidance from 27-31 cents to 35-37 cents. Analysts had been expecting 29 cents. Management also announced June same store sales results that topped analyst expectations.

Creators of ladies' fashions appeal to potential customers in a variety of ways. Offering high quality at reasonable prices has been a successful formula for one Charlotte, North Caolina firm. It even publishes its own fashion magazine.

Cato Corporation (NYSE:CTR) operates women's fashion specialty retail stores in the southeastern United States. It offers an assortment of apparel and accessories, including sportswear, dresses, coats, shoes, lingerie, costume jewelry, and handbags. The company operates 1,276 retail stores under the names Cato, It's Fashion!, Cato Fashions and Cato Plus, in 31 states. The stores are located primarily in strip shopping centers anchored by national discounters, or market-dominant grocery stores.

The firm surprised the Street late last month, when it reported Q4 EPS of 40 cents. Analysts had been expecting 36 cents. Revenues of $230.7 million were pre-announced. Management also guided Q1 EPS to 77-79 cents (71 cent consensus) and said the company expects to open ninety new stores this year. The stock followed a three day market advance with a pop into a bullish "flag" pattern on the quarterly report. Stocks frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the shares with one "strong buy," one "buy" and two "holds." The CTR P/E ratio (14.48), Price to Sales ratio (0.84), Price to Book ratio (2.66), Price to Cash Flow ratio (10.19), Return on Assets (12.27%) and Return on Investment (17.64%) compare favorably with industry, sector and S&P 500 averages.

Institutions own about 93% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past twelve months, it has traded between $20.30 and $26.70. A stop-loss of $20.25 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.