HKF Hancock Fabrics

Hancock Fabrics, Inc. (NYSE:HKF), today reported that sales in the five-week period ended October 1, 2005 totaled $37.6 million compared with $40.0 million for the same period of the prior year. Sales in comparable stores decreased 6.3% in September. In the first two months of the third quarter, total sales were $66.9 million versus $70.7 million in the same period of fiscal 2004, and comparable store sales declined 6.3%. Year-to-date, total sales were $248.0 million in 2005 and $265.6 million in 2004. Comparable store sales for the eight months to date decreased 7.2%. Jane Aggers, Chief Executive Officer, commented, "After September's disappointing first week in which Hurricane Katrina hit and gas prices spiked, we did see some improvement in our trend. Year-to-date, through August, comparable store sales had been down 7.3%, and they were down almost 20% during the first week of September. However, over the last four weeks of September, our business improved somewhat, as comparable store sales were down 3.2%. During that four-week period, the impact of the month's second hurricane was largely offset by hurricane activity during the same period of last year." "We are cautiously optimistic that the initiatives implemented in mid-September have started to take hold. While, we acknowledge that there is still market risk, we remain committed to taking the steps that we can control to improve the fall and holiday season," Aggers concluded. Hancock Fabrics, Inc. is a specialty retailer of fabric and related home sewing and decorating accessories. The Company operates 448 retail fabric stores in 43 states and operates an internet store under the domain name, www.hancockfabrics.com.