Gottschalks May Comps Slip 3.8%

Gottschalks Inc. same store sales for the month of May 2007 decreased 3.8% from the prior year. Total sales for the month decreased 5.1% to $46.4 million from $48.9 million in May 2006. On a year-to-date basis, same store sales decreased 1.5% from the same period of the prior year. Total sales for the year-to-date period decreased by 2.2% to $188.2 million compared to $192.4 million for the same period of fiscal 2006. The Company operated five fewer stores in the month and four fewer stores for the year-to-date period compared to the same periods of fiscal 2006.

Jim Famalette, president and chief executive officer of Gottschalks said, “Our sales for May were below our expectations as we experienced a shift in a major cosmetics event from May into June which we believe impacted store traffic during the month. However, we are pleased with the results generated from dresses, juniors and childrens, which were our best performing merchandise categories for the month. Additionally, while we continued to experience weakness in textiles we generated solid sales of furniture and mattresses. Comp store inventory was up slightly at the end of the month and we are in a good position for the summer selling season.”

    Sales results are summarized as follows:


                                                                    Same Store
                               June 2,          May 27,    Total %     Sales %
                                2007             2006       Change     Change
                                      (in 000's)
    Sales, 4 Weeks Ended      $  46,399       $  48,913     (5.1%)      (3.8%)
    Sales, 17 Weeks Ended     $ 188,188       $ 192,425     (2.2%)      (1.5%)