Cost Plus Revises Fourth Quarter Guidance

    Business Editors

    OAKLAND, Calif.--(BUSINESS WIRE)--Jan. 6, 2005--Cost Plus, Inc. (Nasdaq:CPWM) today revised its estimates for sales and earnings for the fourth quarter of fiscal 2004. Same store sales are now expected to be down by approximately 1.5% versus prior guidance of a 2.5% increase from the fourth quarter of fiscal 2003. Total fourth quarter sales should be approximately $342 million, an increase of 10%. Prior guidance called for total sales of $356 million.
    The Company noted that customer traffic, as gauged by transaction count, had been below its expectations until Christmas. Since then, the trend has been decidedly positive.
    Sales were weak throughout the month of November. Although same store sales for December moved into positive territory, the improvement was not sufficient to fully offset the November weakness. Post-Holiday comparable store sales results have been positive, with growth in gift card redemptions contributing to the increase.
    The Company now estimates earnings for the fourth quarter will be approximately $1.06 per diluted share versus prior guidance of $1.32 per diluted share. The Company indicated that in addition to the impact of the same store sales shortfall, a larger than anticipated shift in sales mix to lower margin consumables and additional markdowns of seasonal inventories remaining after the Holidays are contributing to lower estimated net earnings.
    In an unrelated matter, the Company indicated that the natural disaster in Asia has not impacted its shipments nor does it appear to have had a significant effect on the manufacturers from whom it purchases products in that area of the world.
    The Company's fourth quarter ends Saturday, January 29, 2005, and final quarterly sales results will be announced Thursday, February 3, 2005.

    The above statements relating to anticipated fourth quarter sales and earnings are "forward-looking statements" which are based on current expectations and are subject to various risks and uncertainties which could cause actual results to differ materially from those forecasted. Such risk factors and uncertainties include, but are not limited to, customer traffic and sales volume for the remainder of January 2005; the timing and rate of gift card redemptions; adverse winter weather conditions; international conflicts; and delays in the flow of merchandise to stores.

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CONTACT: Cost Plus, Inc. Murray Dashe, 510-893-7300 John Luttrell, 510-808-9119

KEYWORD: CALIFORNIA INDUSTRY KEYWORD: BANKING CONSUMER/HOUSEHOLD RETAIL SOURCE: Cost Plus, Inc.

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