Catherines Stores Corporation reports first quarter operating results.

MEMPHIS, Tenn.--(BUSINESS WIRE)--May 22, 1996--Catherines Stores Corporation (NASDAQ:CATH) reported Wednesday that net income for the first quarter of fiscal 1996 decreased 6.4% to $2.2 million from $2.3 million in the prior year. Earnings per share were $0.28 for the current year compared to $0.30 last year.

Sales for the first quarter were $70.5 million, a 3.8% increase over prior year sales of $67.9 million. Comparable stores' sales decreased 1.1% for the first quarter.

During the quarter, the company opened 21 new stores and closed two unprofitable stores. Three additional new stores opened in early May.

Bernard J. Wein, president and chief executive officer, commenting on the results of operations, stated, "The retail apparel industry remains difficult. We've seen an increase in the number of customers shopping our locations, however, they are very selective in their purchases. Our customer base remains strong and our merchants are striving to bring them the fashion newness they desire. We are continually looking to improve efficiency and are adding technology to allow our personnel easier and faster access to data so they can react quicker to market trends. We are maintaining a conservative financial position in light of this continued difficult environment."

Catherines Stores Corporation is a Memphis-based specialty retailer selling large-size women's apparel in 454 stores in 40 states operating under the names Catherine's; PS...Plus Sizes, Plus Savings; Added Dimensions; and The Answer. -0-

            Catherines Stores Corporation and Subsidiaries
                  Consolidated Statements of Income
            (amounts in thousands except per share data)
                            Unaudited

                                      Thirteen Weeks Ended
                                May 4, 1996         April 29, 1995

Net sales                    $ 70,464   100.0%    $ 67,858   $100.0%
Cost of sales, including
 buying and occupancy
 costs                         47,493    67.4%      45,791     67.5%
Gross margin                   22,971    32.6%      22,067     32.5%
Selling, general and
 administrative expenses       18,769    26.6%      17,718     26.1%
Amortization of
 intangible assets                301     0.4%         302      0.4%
Operating income                3,901     5.5%       4,047      6.0%
Interest and other, net           291     0.4%         184      0.3%
Income before income taxes      3,610     5.1%       3,863      5.7%
Provision for income taxes
 (as a percentage of income
  before taxes)                 1,455    40.3%       1,562     40.4%
Net income                   $  2,155     3.1%     $ 2,301      3.4%
Net income per common share  $   0.28              $  0.30
Weighted average number of
 common shares outstanding      7,834                7,801

                        Consolidated Balance Sheets
                           (amounts in thousands)

                                         May 4,    Feb. 3,  April 29,
                                          1996      1996      1995
Assets
 Cash and cash equivalents              $  4,410  $  3,955  $  3,614
 Receivables                               4,960     3,781     6,352
 Merchandise inventory                    56,941    50,078    57,508
 Other current assets                      5,131     4,499     4,328
 Property and equipment, net              33,022    31,397    30,053
 Other assets and deferred charges, net    3,174     3,300     3,459
 Goodwill                                 24,271    24,450    25,257
 Total assets                           $131,909  $121,460  $130,571

Liabilities and stockholders' equity
 Accounts payable and other
  current liabilities                   $ 45,302  $ 41,101  $ 49,713
 Long-term bank debt                      10,422     6,000     5,500
 Other long-term liabilities               1,751     2,127     4,085
 Stockholders' equity                     74,434    72,232    71,273
 Total liabilities and
  stockholders' equity                  $131,909  $121,460  $130,571

CONTACT: Catherines Stores Corporation, Memphis

David C. Forell, 901/363-3900, ext. 271