Arden Group, Inc. Announces Second Quarter Earnings.

LOS ANGELES -- Arden Group, Inc. (Nasdaq:ARDNA) today released its sales and income figures for the second quarter ended July 1, 2006.

Arden Group, Inc. is the parent company of Gelson's Markets which operates 18 full-service supermarkets in Southern California carrying both perishable and grocery products.

ARDEN GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
                    SECOND QUARTER EARNINGS RELEASE
                              (UNAUDITED)

(In Thousands, Except Share and Per Share Data)

                                   Thirteen Weeks  Twenty-Six Weeks
                                        Ended            Ended
                                July 1,   July 2,  July 1,   July 2,
                                 2006       2005    2006      2005

Sales                      (a) $119,114  $116,354 $237,167  $232,330

Operating Income           (b)    7,353     7,283   15,779    16,281
Interest, dividend and
 other income(expense),
 net                       (c)      508       351      897       606

   Income before income taxes     7,861     7,634   16,676    16,887
Income tax provision              3,203     3,111    6,795     6,881

   Net income                    $4,658    $4,523   $9,881   $10,006

Basic and diluted net
 income per common share   (d)    $1.44     $1.34    $3.04     $2.96

Basic and diluted weighted
 average common shares
 outstanding               (d) 3,229,429 3,382,632 3,254,932 3,382,942


(a) Sales increased 2.4% and 2.1% during the thirteen and
twenty-six weeks ended July 1, 2006, respectively, compared to the
same periods of 2005. The second quarter of 2006 included Easter sales
which occurred in the first quarter of 2005. In addition, the Company
has experienced sales growth due in part to product pricing decisions
and an increase in customer count.

(b) Operating income for the second quarter of 2006 and 2005
includes compensation expense related to stock appreciation rights
(SARs) of $1,832 and $841, respectively. Excluding SARs compensation
expense, operating income increased to 7.7% of sales during the second
quarter of 2006 from 7.0% in the same period of 2005.

On a year-to-date basis, operating income for the first half of
2006 reflects SARs compensation expense of $2,420 which includes the
impact of the adoption of Statement of Financial Accounting Standard
No. (SFAS) 123(R) (revised 2004), "Share-Based Payment," an increase
in the fair value of SARs since fiscal 2005 year end and additional
vesting of SARs. During the same period of 2005, the Company reversed
$751 of SARs compensation expense recognized in previous periods as a
result of a reduction in the Company's Class A Common Stock price
during that period. Operating income excluding the impact of SARs
compensation expense was 7.7% and 6.7% of sales in the first half of
2006 and 2005, respectively.

(c) Interest income increased during the thirteen and twenty-six
weeks ended July 1, 2006 compared to the same periods of the prior
year due to an increase in cash levels and higher interest rates in
2006.

(d) During January and February 2006, the Company purchased an
aggregate of 149,573 shares of its Class A Common Stock from unrelated
parties in private transactions which resulted in a reduction of the
weighted average common shares outstanding and an increase in basic
and diluted net income per common share.