HKF Hancock Fabrics

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.