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Cato raises outlook on better October sales

CHARLOTTE, N.C. (AP) -- Clothing retailer Cato said Thursday its sales improved in October, and it raised its guidance for the third quarter.

Cato said sales rose 4 percent to $66.7 million in October, and sales at stores open at least a year increased 3 percent. The company said the retail environment remains difficult, but its sales were helped by cooler weather compared to last year.

Sales in stores open at least one year is a key measure of a retailer's health because it excludes sales at stores that recently opened or closed, and thereby measures growth at ongoing locations.

The report covers the four-week period that ended on Saturday.

Cato said its total revenue increased 1 percent to $198.8 million in the third quarter. Sales at locations open at least a year fell 1 percent

According to FactSet, analysts expected revenue of $198.3 million and a 2.5-percent decline in sales at stores open at least a year.

Cato is now forecasting net income of 13 cents to 15 cents per share in the third quarter. It had called for net income of 2 to 9 cents per share and said it expected to reach the high end of that range.

Analysts were projecting net income of 9 cents per share. The company is scheduled to report its third-quarter results on Nov. 21.

Cato Corp. operates 1,318 stores in 32 states under the names Cato, Versona and It's Fashion. The company's shares added 25 cents to $30.43 in morning trading.