Stage Stores July Sales Up 6.1%; Comps Up 2.4%

Stage Stores, Inc. reported that total sales for the four-week period ended July 30, 2005 increased 6.1% to $94.5 million from $89.1 million in the prior year four-week period ended July 31, 2004. Comparable store sales increased 2.4% versus a decrease of 7.8% last year. The company noted that its July 2004 comparable store sales results were negatively impacted by a calendar shift in the Texas sales tax holiday weekend, which moved this significant event from July in 2003 to August in 2004. The company further noted that this year's Texas sales tax holiday weekend will take place in August just as it did last year.

The company stated that most of its key merchandise departments achieved comparable stores sales increases during the month. Of this group, the top performing categories were women's special sizes (+15.3%), home decor (+15.2%) and accessories (+14.9%).

For the second quarter ended July 30, 2005, the company reported that total sales increased 10.6% to $309.5 million from $279.9 million last year, while comparable store sales for the quarter increased 7.0% compared to a decrease of 3.2% in the prior year period.

Jim Scarborough, chairman, president and chief executive officer, commented, “We are delighted with the continued strength of our business. Having just completed a solid second quarter in which our comparable store sales were up a strong 7.0%, we enter the third quarter well positioned with exciting new merchandise for the upcoming back-to-school selling season.”

                             SALES SUMMARY

                  Comparable Store Sales Trend        Total Sales
  Fiscal Period        % Increase (Decrease)        ($ in Millions)
                 -----------------------------  ----------------------
                     2005            2004          2005        2004
                 ------------    -------------  ----------  ----------
   1st Quarter       4.9%            4.5%       $310.1      $289.7
       May           7.0             1.0         100.0        90.6
      June          11.1            (2.5)        115.0       100.1
      July           2.4            (7.8)         94.5        89.1
   2nd Quarter       7.0            (3.2)        309.5       279.9 (a)
  Year-To-Date       5.9             0.6         619.5 (a)   569.5 (a)

(a) Total does not foot due to rounding.

Mr. Scarborough further commented, “Based on our preliminary operating results for the second quarter, we currently believe that we will be at or near the high end of our previously provided earnings outlook range for the period of $0.26 to $0.30 per diluted share.”

Store Activity

The company reported that it opened four new Stage stores and one new Bealls store during July. The new stores were opened in Clarksville and West Helena, Arkansas, Douglas, Arizona, Floresville, Texas and Marshall, Missouri.

For the second quarter, a total of seven new stores were opened and two stores were closed. As a result of the five net new stores added during the period, the company ended the quarter with 542 stores.