Cost Plus, Inc. Reports Annual 1997 Results; Net Income Up 35%; EPS Up 25%.

OAKLAND, Calif.--(BUSINESS WIRE)--March 17, 1998--Cost Plus, Inc. (NASDAQ:CPWM) today reported record financial results for its fourth quarter and fiscal year 1997 ended January 31, 1998.

Net income for fiscal year 1997 increased 35.1% to $10.0 million compared to net income of $7.4 million in the prior fiscal year. Earnings per share for fiscal year 1997 were $1.15, a 25.0% increase, compared with earnings per share of $0.92 in fiscal year 1996. For the fourth quarter of fiscal year 1997, net income increased 23.6% to $11.0 million from $8.9 million in the prior year's fourth quarter. Earnings per share were $1.20 for the fourth quarter of fiscal year 1997, a 14.3% increase over the prior year's fourth quarter earnings per share of $1.05.

Earnings per share were calculated based on weighted average shares outstanding which were more than 7% higher than the prior year for both the fourth quarter and fiscal year ended January 31, 1998. The increase in shares resulted primarily from the company's secondary equity offering completed in October 1997.

Net sales for fiscal year 1997 were $260.5 million, a 21.3% increase over the prior fiscal year's net sales of $214.8 million, with same store sales increasing 7.0%. During the fourth quarter of fiscal 1997, net sales increased 21.3% to $110.0 million from $90.7 million in the fourth quarter of fiscal year 1996. Same store sales for the quarter increased 7.1%.

"Our strong financial performance in fiscal 1997 reflects the excitement we have continued to generate for our customers through our unique products and the sense of adventure in our stores, as well as our ability to successfully manage growth," said Murray H. Dashe, the company's chairman and chief executive officer. "Our growth in 1997 was driven by a seventh consecutive year of comparable store sales in excess of 6% and the addition of 12 new stores to our expanding chain," he added.

Dashe concluded, "With the completion of another successful year, we are focused on executing key strategies for fiscal year 1998. We are committed to strategic expansion of the chain, earnings improvement for our shareholders and new discoveries from around the world to share with our customers."

Cost Plus, Inc. is a leading specialty retailer of casual home living and entertaining products. As of January 31, 1998, the company operated 70 stores in 12 states, all under the name Cost Plus World Market compared with 58 stores in 10 states as of February 1, 1997. -0-

                              COST PLUS, INC.
             STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS
           (In thousands except percents and per share amounts)

                             Quarter Ended          Quarter Ended
                            January 31, 1998       February 1, 1997
                              (Unaudited)            (Unaudited)

Net sales                $109,988     100.0%     $90,660      100.0%
Cost of sales and
 occupancy                 66,430      60.4       54,716       60.4
  Gross Profit             43,558      39.6       35,944       39.6
Selling, general and
 administrative expenses   24,748      22.5       20,365       22.4
Preopening store expenses     465       0.4           68         .1

Income from operations     18,345      16.7       15,511       17.1
Interest expense              309       0.3          456         .5

Income before income taxes 18,036      16.4       15,055       16.6
Provision for income taxes  7,071       6.4        6,173        6.8

  Net income              $10,965      10.0%      $8,882        9.8%

Net income per common
 and common equivalent
 share (diluted)            $1.20                  $1.05

Weighted average common
and common equivalent
 shares outstanding         9,104                  8,441



                           Fiscal Year Ended      Fiscal Year Ended
                            January 31, 1998       February 1, 1997

Net sales                $260,494      100.0%   $214,814      100.0%
Cost of sales and
 occupancy                164,394       63.1     135,072       62.9
  Gross profit             96,100       36.9      79,742       37.1
Selling, general and
 administrative expenses   75,238       28.9      62,649       29.2
Preopening store expenses   2,744        1.0       2,053         .9

Income from operations     18,118        7.0      15,040        7.0
Interest expense            1,679        0.7       2,451        1.1

Income before income taxes 16,439        6.3      12,589        5.9
Provision for income taxes  6,432        2.5       5,162        2.4

  Net income              $10,007        3.8%     $7,427        3.5%

Net income per common
 and  common equivalent
 share (diluted)            $1.15                  $0.92

Weighted average common
 and common equivalent
 shares outstanding         8,699                  8,105


                                 COST PLUS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)

                                 January 31, 1998    February 1, 1997

ASSETS
Current assets:
  Cash and cash equivalents           $27,434             $14,398

  Merchandise inventories              56,606              42,605

  Other current assets                  3,137               2,413


  Total current assets                 87,177              59,416


Property and equipment, net            53,539              60,205


Other assets                           11,284               8,577


  Total assets                       $152,000            $128,198


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                    $13,707             $14,706

  Income taxes payable                  6,282               6,095
  Accrued compensation                  7,132               6,607
  Other current liabilities             7,426               7,201

  Total current liabilities            34,547              34,609

Capital lease obligations              15,692              14,215
Deferred income taxes                   1,969               3,548
Other long-term obligations             4,183               2,617

Shareholders' equity:
 Common stock                              87                  81
 Additional paid-in capital           103,553              91,166
 Deficit                               (8,031)            (18,038)

  Total shareholders' equity           95,609              73,209

Total liabilities and shareholders'
 equity                              $152,000            $128,198
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CONTACT: Cost Plus Inc.

Murray Dashe, 510/893-7300 ext. 3011

or

Pat Saucy, 510/893-7300 ext. 3071