Hancock Fabrics Reports August Sales

Hancock Fabrics, Inc. (NYSE:HKF), today reported that
sales in the four-week period ended August 26, 2006 totaled $25.8
million compared with $29.3 million in the same period of the prior
year. Sales in comparable stores decreased 7.7% in August.
   In the first seven months of fiscal 2006, total sales were $205.4
million versus $210.4 million in the same period of fiscal 2005, and
comparable store sales declined 1.3%, including a 4.9% benefit from 40
stores that have now been liquidated in connection with store closing
sale events.
   "Comparable store sales were lower in August due to the
combination of an overall reduction in promotional activity, continued
weakness in the home decorating sector, and a slow start to the fleece
season. We are pleased with our merchandise assortments and marketing
strategy and are cautiously optimistic as we enter the important Fall
selling season," said Jane Aggers, Chief Executive Officer.
   Hancock Fabrics, Inc. - America's Fabric Store - is committed to
serving creative enthusiasts with a complete selection of fashion and
home decorating fabrics, sewing accessories, needlecraft supplies and
sewing machines. The Company operates 404 retail stores in 40 states
and an Internet store at www.hancockfabrics.com.