Gottschalks July Comps Slip 0.7%

Gottschalks Inc. saw July same store sales decrease 0.7% from the prior year. Total sales for the month decreased 0.5% to $43.3 million compared to total sales of $43.5 million in July 2005.

For the thirteen weeks ended July 29, 2005, same store sales increased 0.8% from the same period of fiscal 2005, and total sales increased 1.1% to $153.2 million compared to $151.6 million for the same period of fiscal 2004. For the year-to-date period, same store sales were flat, while total sales increased 0.3% to $296.8 million from $295.7 million for the same period last year.

Jim Famalette, president and chief executive officer of Gottschalks, said, “The sales in our California stores were impacted by the record heat wave we experienced, while our Pacific Northwest stores had a solid sales gain during the month. We did see our California performance improve in the final weekend of the month as temperatures returned to more normalized levels. Our best performing merchandise categories during July were cosmetics, shoes, better sportswear and swimwear. Our inventory was down 3% at the end of the month on a comparable basis.”

The company’s newest store will open on August 31st in Eugene, Oregon.

Sales results are summarized as follows:

                                                                 Same Store
                               July 29,        July 31,    Total %    Sales %
                                 2006            2005      Change     Change
                                       (in 000's)
    Sales, 4 Weeks Ended         $43,295        $43,520    (0.5%)     (0.7%)

    Sales, 13 Weeks Ended       $153,249       $151,637     1.1%       0.8%

    Sales, 26 Weeks Ended       $296,761       $295,741     0.3%       0.0%