DUCK Alco Stores, Inc. (MM)

Duckwall-ALCO Stores, Inc. Reports August Sales ABILENE, Kan., Sept. 2 /PRNewswire-FirstCall/ -- Duckwall-ALCO Stores, Inc. (NASDAQ:DUCK), a leading regional retailer operating 265 full-line discount and hometown variety stores in 21 states in the central portion of the United States, today announced that its sales for the four weeks ended August 29, 2004 (fiscal month of August) decreased approximately 1.2% to $30.5 million, compared with $30.8 million in the prior-year month. Same-store sales decreased approximately 2.7% during fiscal August 2004, whereas same-store sales in fiscal August 2003 increased 5.1% from the prior-year period. ALCO stores, which generate approximately 92% of the Company's total revenues, recorded a 3.0% same-store sales decrease, while the Duckwall division recorded an increase of 1.3%. Management believes that year-to-year sales comparisons for the month were negatively impacted by higher gasoline prices, which affected consumer discretionary spending; the timing of the Labor Day holiday (fiscal August in 2003 but fiscal September in 2004); and the boost to sales in fiscal August 2003 that was derived from the blockbuster audio/video release of "Lord of the Rings". Furthermore, when compared with last year, sales during fiscal August 2004 were unfavorably impacted by the absence of Federal tax rebates and credits that were distributed during the summer months (July and August) in 2003. Sales during the most recent fiscal month benefited from a Texas sales tax "holiday" in early August 2004, whereas last year's Texas sales tax "holiday" occurred in the fiscal month of July. Also, a Duckwall back-to-school advertising circular was distributed during the first week of fiscal August 2004, while no such circular was distributed in fiscal August 2003. Merchandise categories that were particularly strong during August included: ladies and men's apparel, consumables and pet supplies. For the thirty weeks ended August 29, 2004, total sales increased approximately 1.7% to $242.3 million, versus $238.2 million in the corresponding period of the prior year, while same-store sales decreased approximately 0.4%. August was highlighted by the completion and grand re-opening of the Company's second "ALCO Market Place" conversion, which opened August 3, 2004 (in Kansas). This new format, which was launched in June 2004 with the opening of the first "ALCO Market Place" conversion (in Oklahoma), devotes approximately 25% of its floor space to a limited, but greatly expanded, assortment of foods including produce, dry goods and products displayed in freezers / coolers. "If the initial Market Place stores perform in accordance with management's expectations, the concept offers exciting possibilities for the future," noted a Company spokesman. "The enlargement of our grocery department represents a natural progression in the Company's successful expansion of its consumable product offerings during the past several years." During the month of August 2004, the Company did not open any ALCO or Duckwall stores and closed 1 ALCO store. Store openings during the first thirty weeks of the current fiscal year included 3 new ALCO stores, 2 ALCO Market Place stores (conversions), and 2 new Duckwall stores. Approximately 4 new ALCO stores and no additional Duckwall stores are scheduled to open during the balance of the fiscal year. Additionally, the Company expects to convert one additional ALCO location to its new "ALCO Market Place" format before the end of the fiscal year. Duckwall-ALCO Stores, Inc. is a leading regional retailer that operates 265 full-line discount and hometown variety stores in 21 states in the central portion of the United States under the names "ALCO", "ALCO Market Place" and "Duckwall", respectively. The Company's strategy is to target smaller markets not served by other regional or national full-line retail discount chains and provide the most convenient access to retail shopping within each market. Duckwall-ALCO Stores, Inc. is headquartered in Abilene, Kansas, and its common stock is listed on the Nasdaq National Market under the symbol "DUCK". Forward-looking statements This press release contains forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995 ("the Act"). Any forward-looking statements are made by the Company in good faith, pursuant to the safe-harbor provisions of the Act. These forward-looking statements reflect management's current views and projections regarding economic conditions, retail industry environments and Company performance. Factors, which could significantly change results, include but are not limited to: sales performance, expense levels, competitive activity, interest rates, changes in the Company's financial condition and factors affecting the retail category in general. Additional information regarding these and other factors may be included in the Company's quarterly 10-Q filings and other public documents, copies of which are available from the Company on request. CONTACT: Dick Mansfield Vice President, Finance, Treasurer and Chief Financial Officer 785-263-3350 x286 e-mail: internet home page: http://www.duckwall.com/ or RJ Falkner & Company, Inc., Investor Relations Counsel, at (800) 377-9893 or via e-mail at DATASOURCE: Duckwall-ALCO Stores, Inc. CONTACT: Dick Mansfield, Vice President, Finance, Treasurer and Chief Financial Officer of Duckwall-ALCO Stores, Inc., +1-785-263-3350, ext. 286, ; or RJ Falkner & Company, Inc., Investor Relations Counsel, +1-800-377-9893, , for Duckwall-ALCO Stores, Inc. Web site: http://www.duckwall.com/

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