Stage Stores, Inc. sales for the month ended August 26, 2006 increased 15.8% to $128.8 million from $111.2 million in August, 2005. Comparable store sales increased 3.8% versus an increase of 1.5% last year. Comparable store sales do not include sales generated at the Company’s recently acquired B.C. Moore stores.

Jim Scarborough, Chairman and Chief Executive Officer, commented, “Our 3.8% comparable store sales increase gets us off to a good start for our back-to-school and fall selling periods. All of our key merchandise categories achieved comparable store sales increases during the month of August, and our top performing businesses were cosmetics (+7.6%), womens special sizes (+7.5%) and home decor (+7.3%).

“Overall for the third quarter, we currently anticipate generating comparable store sales increases in the low single digit range,” concluded Mr. Scarborough.

                      Comparable Store Sales Trend     Total Sales
                         % Increase (Decrease)       ($ in Millions)
                      ---------------------------- -------------------

    Fiscal Period         2006           2005        2006      2005
--------------------- -------------- ------------- --------- ---------
     1st Quarter           3.2           4.9        343.5     310.1
     2nd Quarter           4.5           7.0        362.1     309.4
       August              3.8           1.5        128.8     111.2
Year-To-Date (7 mos)       3.8           5.2        834.4     730.7

During August, the Company opened new Peebles stores in Lafayette, GA, Ellwood City, PA and Mocksville, NC. In addition, the Company opened 23 converted B.C. Moore stores under its Peebles banner on August 3rd, opened another 11 converted stores on August 17th, and opened 9 more converted stores on August 30th. Of the 43 converted B.C. Moore stores that have been opened, 10 are located in Alabama, 25 are located in Georgia and 8 are located in South Carolina. Going forward, an additional 8 to 9 stores are scheduled to open every two weeks through mid-October.