Gottschalks Comps Up 0.9%; Total Sales Down 0.9%

Gottschalks Inc. announced same store sales for the month of January 2005 increased 0.9%. Total sales for the month decreased 0.9% to $35.9 million from $36.2 million in January 2003. For the month the company operated one less store than the same period of fiscal 2003.

Fourth quarter fiscal 2004 same store sales decreased 2.3% and total sales decreased 2.9% to $222.5 million from $229.0 million for the same period of fiscal 2003. For the 52-week fiscal year, same store sales increased 0.3% from the comparable period of fiscal 2003. Total sales on a year-to-date basis decreased 0.7% to $662.7 million compared to $667.5 million in the same period of fiscal 2003. For the fourth quarter and the full year, the company operated seven fewer stores than in the prior year periods.

Jim Famalette, president and CEO of Gottschalks, said, “We are pleased with our comparable store sales performance for the month, which was on top of a strong 8.6% increase in January 2004. The best performing areas in January were better and moderate sportswear, intimate apparel, shoes and housewares. Although our sales results for the quarter were not as strong as we had planned, we continued to successfully focus on managing our inventory, improving our turnover and enhancing our margins. We anticipate earnings will be in line with our previous guidance of 43 cents to 45 cents per diluted share.

“Having celebrated our 100th anniversary and completing a very momentous year in Gottschalks history, we look forward to continuing the positive momentum generated this past year in fiscal 2005. Our lifestyle center store in Fresno and our second planned new store in Oregon are both under construction and on schedule for their respective openings later this year. That said, we look forward to a profitable year ahead in which we grow both our top and bottom lines,” concluded Mr. Famalette.

Sales results are summarized as follows:

                                                                Same Store
                                                       Total %     Sales %
                          January 29,    January 31,   Increase/   Increase/
                             2005           2004       Decrease    Decrease
                                  (in 000's)

    Sales, 4 Weeks Ended    $35,874       $36,182        (0.9%)       0.9%

    Sales, 13 Weeks Ended  $222,485      $229,027        (2.9%)     (2.3%)

    Sales, 52 Weeks Ended  $662,687      $667,547        (0.7%)       0.3%