Cost Plus, Inc. Reports Second Quarter Results.

OAKLAND, Calif.--(BUSINESS WIRE)--Aug. 20, 1996--Cost Plus, Inc. (NASDAQ: CPWM) announced today financial results for the thirteen and twenty-six-week periods ended Aug. 3, 1996.

For the second quarter ended Aug. 3, 1996, the Company reported improved results of a net loss of $197,000, or $.02 per share, compared with a net loss of $920,000, or $.15 per share, for the thirteen-week period ended July 22, 1995.

The Company generated income from operations of $145,000 during the second quarter, compared with an operating loss of $343,000 for the same period in 1995. This improvement was due to an increase in gross profit and the continued leveraging of selling, general and administrative expenses. Fiscal 1996 second quarter net sales increased 20.9%, to $40.0 million, from $33.1 million, a year ago. Comparable store sales increased 4.9% for the second quarter.

Year-to-date, Cost Plus reported a net loss of $592,000 or $.08 per share compared with last year's net loss of $1.56 million, or $.25 per share. Income from operations was $381,000, for the twenty-six-week period ended Aug. 3, 1996, compared with an operating loss of $409,000, in 1995. Net sales increased 21.7%, to $79.1 million, from $65.0 million, for the same fiscal period ended July 22, 1995. Comparable store sales for the twenty-six-week period ended Aug. 3, 1996 were up 4.8%.

"Both the Home and Consumable merchandise groups performed well during the quarter, with total sales exceeding our expectations," said Ralph D. Dillon, chairman and chief executive officer. "We benefited from significant contributions from our new stores and obtained cost efficiencies from expenses distributed over an expanding store base. We were very pleased with the reception from consumers for the two new store openings in the Houston, Texas market. Our new store expansion is on track for 1996. We currently plan to open six more stores this fiscal year."

As of Aug. 3, 1996, Cost Plus operated a total of 52 stores, an increase of seven stores since July 22, 1995.

Cost Plus, Inc. is a leading retailer of casual home living and entertaining products. The Company operates 52 stores under the name "Cost Plus World Market" in 10 states. -0-

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

                                   Thirteen Weeks Ended

                                 Aug. 3,         July 22,
                                  1996             1995

Net Sales                       $39,986  100.0%  $33,083  100.0%
Cost of sales and occupancy      25,774   64.4    21,457   64.8
  Gross profit                   14,212   35.6    11,626   35.2

Selling, general and
 administrative expenses         13,511   33.8    11,442   34.6
Preopening store expenses           556    1.4       527    1.6

Income (loss) from operations       145     .4      (343)  (1.0)
Interest expense                    479    1.2     1,217    3.7

Income (loss) before income taxes  (334)   (.8)   (1,560)  (4.7)
Income taxes (benefit)             (137)   (.3)     (640)  (1.9)

Net loss                        $  (197)   (.5)  $  (920)  (2.8)

Net loss per common and common
equivalent share                $  (.02)         $  (.15)

Weighted average common and
 common equivalent shares
 outstanding                      8,511            6,153

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

                                  Twenty-Six Weeks Ended

                                  Aug. 3,        July 22,
                                   1996            1995

Net Sales                       $79,113 100.0%   $64,957 100.0%
Cost of sales and occupancy      51,326  64.9     42,581  65.6
  Gross profit                   27,787  35.1     22,376  34.4

Selling, general and
 administrative expenses         26,566  33.5     22,175  34.1
Preopening store expenses           840   1.1        610    .9

Income (loss) from operations       381    .5       (409)  (.6)
Interest expense                  1,384   1.7      2,233   3.4

Income (loss) before income
 taxes                           (1,003) (1.2)    (2,642) (4.0)
Income taxes (benefit)             (411)  (.5)    (1,084) (1.6)

Net loss                        $  (592)  (.7)   $(1,558) (2.4)

Net loss per common and common
equivalent share                $  (.08)         $  (.25)

Weighted average common and common
equivalent shares outstanding     7,733            6,153

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

                                  Aug. 3,         July 22,
                                   1996             1995

ASSETS
Current assets:
  Cash and cash equivalents    $  1,314          $  2,040
  Merchandise inventories        41,231            32,805
  Other current assets            2,060             2,001

   Total current assets          44,605            36,846
Property and equipment, net      58,026            56,033
Other assets                      8,222             8,322

   Total assets                $110,853          $101,201

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable             $  9,583          $  9,158
  Income taxes payable              677                --
  Accrued compensation            5,047             3,426
  Revolving line of credit        2,909            10,503
  Other current liabilities       6,718             5,683

   Total current liabilities     24,934            28,770
Capital lease obligations        14,424            14,801
Note payable to related parties      --            19,895
Deferred income taxes             4,455             4,646
Other long-term obligations       2,228             2,149

Shareholders' equity:
  Common stock                       81                58
  Additional paid-in capital     90,788            61,722
  Deficit                       (26,057)          (30,840)

    Total shareholders' equity   64,812            30,940

Total liabilities and
 shareholders' equity          $110,853          $101,201

CONTACT: Cost Plus World Market

Alan Zimtbaum, 510/893-7300 Ext. 3006