Hancock Fabrics Reports September Sales

  
    
  
  
    
      Hancock Fabrics, Inc. (NYSE: HKF), today reported that sales in the 
      five-week period ended September 30, 2006 totaled $36.9 million, 
      compared to $37.6 million in the same period of the prior year. Total 
      sales decreased 1.9%, due to having 44 fewer stores this year. 
      Comparable store sales increased 3.3% in September.
    
    
      In the first two months of the third quarter, total sales were $62.7 
      million versus $66.9 million in the same period of fiscal 2005, and 
      comparable store sales declined 1.5%. Year-to-date, total sales were 
      $242.3 million in 2006 and $248.0 million in 2005. Comparable store 
      sales for the eight months to date declined 0.6%, including a 4.2% 
      benefit from 40 stores that had been liquidated by the end of August in 
      connection with store closing sale events and two other stores that are 
      in the process of being liquidated.
    
    
      “We are pleased with the increase in 
      comparable store sales during the kick-off month for the Fall/Winter 
      selling season. All major merchandise departments improved in relation 
      to recent sales trends. We remain cautiously optimistic that our 
      merchandise assortments and marketing plans will remain productive 
      during the coming months. From a financial position, we are satisfied 
      with both our inventory levels for the season and with our current debt 
      level. Debt was $61 million at the end of September 2006, or $3 million 
      less than the $64 million level at the same time last year,” 
      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.
    
  
Hancock Fabrics, Inc. (NYSE: HKF), today reported that sales in
the five-week period ended September 30, 2006 totaled $36.9 million,
compared to $37.6 million in the same period of the prior year. Total
sales decreased 1.9%, due to having 44 fewer stores this year.
Comparable store sales increased 3.3% in September.

   In the first two months of the third quarter, total sales were
$62.7 million versus $66.9 million in the same period of fiscal 2005,
and comparable store sales declined 1.5%. Year-to-date, total sales
were $242.3 million in 2006 and $248.0 million in 2005. Comparable
store sales for the eight months to date declined 0.6%, including a
4.2% benefit from 40 stores that had been liquidated by the end of
August in connection with store closing sale events and two other
stores that are in the process of being liquidated.

   "We are pleased with the increase in comparable store sales during
the kick-off month for the Fall/Winter selling season. All major
merchandise departments improved in relation to recent sales trends.
We remain cautiously optimistic that our merchandise assortments and
marketing plans will remain productive during the coming months. From
a financial position, we are satisfied with both our inventory levels
for the season and with our current debt level. Debt was $61 million
at the end of September 2006, or $3 million less than the $64 million
level at the same time last year," 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.