Stage Stores, Inc. July sales increased 7.0% to $109.2 million from $102.1 million for the prior-year period. The company noted that the referenced prior year sales results exclude inventory liquidation sales of $10.5 million generated by the acquired B.C. Moore stores prior to their conversion to Peebles stores. Comparable store sales for the month decreased 1.7% versus an increase of 6.2% last year.


The company's top performing categories of business during the month included dresses, which posted a comparable stores sales increase of 14.3%, and cosmetics at 12.4 %.

For the second quarter ended August 4, 2007, the company reported that its total sales increased 8.9% to $359.2 million from $329.7 million for last year's second quarter ended July 29, 2006. The Company noted that the referenced prior year sales results exclude inventory liquidation sales of $32.4 million generated by the acquired B.C. Moore stores prior to their conversion to Peebles stores. Comparable store sales for the second quarter grew 0.5% versus an increase of 4.5% for the prior year period.


Jim Scarborough, chairman and CEO, commented, “Unusually heavy rains and flooding conditions throughout much of July in many of our south central markets, and a generally lackluster retail environment, negatively impacted our July and second quarter sales results. Although we did not reach our sales goals for the quarter, our gross margin results were better than we had anticipated due to tighter inventory management practices versus our summer sales trend, which resulted in less aggressive pricing of our clearance merchandise during the second quarter. As a result, we still expect to report Q2 earnings within the lower end of our previously provided guidance range of $0.23 to $0.26 per diluted share. We will provide our updated full year sales and earnings outlooks when we announce our second quarter results in two weeks.”

                           SALES SUMMARY


                        Comparable Store

                           Sales Trend              Total Sales

                     % Increase (Decrease)        ($ in Millions)

                     ———————– ————————-

   Fiscal Period         2007        2006        2007         2006

——————– ———— ———- ———— ————

    1st Quarter              0.1%       3.2%      $358.2        $343.5

        May                  1.7        4.0        116.6         116.1

        June                 1.4        3.5        133.4         133.4

        July                (1.7)       6.2        109.2         112.6

    2nd Quarter              0.5        4.5        359.2         362.1

Year-To-Date (6 Mos)         0.3        3.8        717.4         705.6


Store Activity

During July, the company opened a new Stage store in Page, Arizona and a new Palais Royal store in Kingwood, Texas. These two July openings brought the total number of stores opened during the first half of the year to fourteen, and kept the company on track to meet its full year goal of opening 45 new stores.