Lower sell-throughs of regular priced goods contributed to a 10% drop in first quarter profit at The Cato Corporation, prompting the value-priced women's fashion retailer to revise its full year guidance.

The Charlotte, North Carolina based firm said net income was $18.7m or $.59 per share, compared to $20.8m or $.65 per share in the same period last year.

Sales for the first quarter were $224.1m, a 2% decrease from the $229.7m reported last time. The company's first quarter comparable store sales decreased 5%.

John Cato, chairman, president, and chief executive officer, said: "As a result of higher than planned inventories at the end of the first quarter, we expect higher markdowns in the second quarter.

"Also, after two quarters of continuing weakness in our sales and the softness in the women's specialty apparel segment, we are forecasting that trend to continue and now estimate comparable store sales to be in the range of down 3% to flat for the second quarter and for the balance of the year."

The company, which operates Cato and It's Fashion! Divisions, now expects second quarter earnings to be in the range of $.27 to $.31 versus $.38 last year.

For the year, it estimates earnings to be in the range of $1.11 to $1.31 versus $1.62 last year.