Cato June same-store sales up 4 pct, raises Q2 outlook

(Reuters) - Women's fashion apparel retailer Cato Corp posted a 4 percent rise in June sales at stores open for at least a year, and raised its second-quarter earnings outlook.

Cato, which currently operates 1330 stores in 32 states in the U.S., said sales for the five-week period ended July 5 rose 7 percent to $88.3 million.

"June sales were better than expected, however, we continue to believe the retail environment will remain difficult," said Chief Executive John Cato in a statement.

The Charlotte, North Carolina-based company now expects second-quarter earnings to be between 42 cents and 44 cents a share and said it continues to manage inventory tightly and "experienced better sell-throughs of regular price and markdown merchandise."

The company, which operates two divisions, "Cato" and "It's Fashion!," had previously estimated earnings of 28 cents a share to 33 cents a share.

Analysts, on average, were expecting second-quarter earnings of 28 cents a share, before special items, according to Reuters Estimates.

Shares of the company closed at $14.72 Wednesday on the New York Stock Exchange.

(Reporting by Lalitha Murali in Bangalore, Editing by Jarshad Kakkrakandy)