UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

450 Fifth Street NW
Washington, D.C. 29549

Form 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):      May 16, 2006     

THE CATO CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware		1-31340		56-0484485
(State or Other Jurisdiction		(Commission		(I.R.S. Employer
of Incorporation)		File Number)		Identification Number)

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 or Former Address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

THE CATO CORPORATION

Item 2.02. Results of Operations and Financial Condition.

On May 16, 2006, The Cato Corporation issued a press release regarding its financial results for the first quarter ending April 29, 2006. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits

     Exhibit 99.1 — Press Release issued May 16, 2006.

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 hereunto duly authorized.

		THE CATO CORPORATION
May 18, 2006		/s/ John P. D. Cato
Date		John P. D. Cato Chairman, President and Chief Executive Officer
May 18, 2006		/s/ Reynolds C. Faulkner
Date		Reynolds C. Faulkner Executive Vice President Chief Financial Officer

Exhibit Index

Exhibit		Exhibit No.
Press Release issued May 16, 2006			99.1

FOR IMMEDIATE RELEASE		CEO Approval___

For Further Information Contact:
          Stuart Uselton
          Vice President
          Treasurer
          704-940-7832

CATO REPORTS 1Q EPS UP 12%
Provides 2Q Guidance

Charlotte, NC (May 16, 2006) — The Cato Corporation (NYSE: CTR) today reported net income of $20.8 million or $.65 per diluted share for the first quarter ended April 29, 2006, compared to net income of $18.4 million or $.58 per diluted share for the first quarter ended April 30, 2005. Net income increased 13% and earnings per diluted share increased 12% from the prior year. Sales for the first quarter were $229.7 million, a 7% increase over sales of $215.1 million for the first quarter last year. The Company’s first quarter comparable store sales increased 2%.

“Our first quarter results slightly exceeded our revised EPS range of $.62 to $.64,” said John Cato, Chairman, President, and Chief Executive Officer. “Gross margin improved over the prior year due to better sell-throughs. We expect second quarter earnings per diluted share to be in the range of $.34 to $.37 versus $.34 last year. For the year, we are estimating earnings per diluted share to be in the range of $1.57 to $1.63 versus $1.41 last year. Comparable store sales are estimated to be in the range of flat to up 2% for the second quarter and balance of the year.”

During the first quarter, the Company opened 11 stores, relocated seven stores, and closed three stores. As of April 29, 2006, the Company operated 1,252 stores in 31 states, compared to 1,188 stores in 31 states as of April 30, 2005.

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

The Cato Corporation is a leading specialty retailer of value-priced women’s fashion apparel operating two divisions, “Cato” and “It’s Fashion!”. The Company offers exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices, every day. 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 the second quarter and year 2006 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. 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 APRIL 29, 2006 AND APRIL 30, 2005
(Dollars in thousands, except per share data)

		Quarter Ended
		April 29,				%				April 30,				%
		2006				Sales				2005				Sales
REVENUES
Retail sales		$	229,741				100.0	%		$	215,064				100.0	%
Other income (principally finance, late fees and layaway charges)			3,319				1.5	%			3,863				1.8	%
Total revenues			233,060				101.5	%			218,927				101.8	%
GROSS MARGIN (Memo)			87,628				38.2	%			78,630				36.6	%
COSTS AND EXPENSES, NET
Cost of goods sold			142,113				61.8	%			136,434				63.4	%
Selling, general and administrative			54,567				23.8	%			49,333				22.9	%
Depreciation			5,168				2.3	%			5,038				2.3	%
Interest expense			10				0.0	%			152				0.1	%
Interest and other income			(1,552	)			-0.7	%			(941	)			-0.4	%
Cost and expenses, net			200,306				87.2	%			190,016				88.3	%
Income Before Income Taxes			32,754				14.3	%			28,911				13.5	%
Income Tax Expense			11,955				5.2	%			10,495				4.9	%
Net Income		$	20,799				9.1	%		$	18,416				8.6	%
Basic Earnings Per Share		$	0.67							$	0.59
Basic Weighted Average Shares			31,084,206								31,104,326
Diluted Earnings Per Share		$	0.65							$	0.58
Diluted Weighted Average Shares			31,814,193								31,793,139

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

		April 29,				April 30,				January 28,
		2006				2005				2006
		(Unaudited)				(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents		$	25,319			$	22,773			$	21,734
Short-term investments			95,752				71,472				86,085
Accounts receivable — net			47,791				49,534				49,644
Merchandise inventories			103,145				105,084				103,370
Other current assets			11,379				12,112				10,844
Total Current Assets			283,386				260,975				271,677
Property and Equipment — net			131,516				118,727				124,104
Other Assets			10,799				10,391				10,855
TOTAL		$	425,701			$	390,093			$	406,636
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities		$	135,515			$	128,771			$	132,563
Noncurrent Liabilities			32,787				34,268				34,125
Stockholders’ Equity			257,399				227,054				239,948
TOTAL		$	425,701			$	390,093			$	406,636