FACTORY 2-U STORES, INC. Announces November Sales.

Business Editors

SAN DIEGO--(BUSINESS WIRE)--Dec. 3, 2003

FACTORY 2-U STORES, INC. (Nasdaq: FTUS) today announced that sales for the four-week period ended November 29, 2003 were $46.9 million, a decrease of 1.7% over sales of $47.7 million for the four-week period ended November 30, 2002. Comparable store sales for the four-week period ended November 29, 2003 increased 2.9% versus a decrease of 9.6% for the same period last year. For the four-week period ended November 29, 2003, the Company did not open or close any stores.

Sales for the forty-three week period ended November 29, 2003 totaled $396.8 million compared to $427.2 million for the forty-three week period ended November 30, 2002, a decrease of 7.1%. Comparable store sales for the forty-three week period ended November 29, 2003 decreased 3.8% versus a decrease of 8.7% for the same period last year. For the forty-three week period ended November 29, 2003, the Company opened 2 new stores and closed 3 stores.

Bill Fields, Chairman and Chief Executive Officer, commented, "Comparable store sales for November were better than expected. On a comparable store basis, customer transaction counts grew 9%, the market basket size grew 8% and the average unit retail declined 12%. Our average unit retail improved over the current year's trend as more apparel items made up the average purchase. Our Home and Domestics businesses were the strongest, with comparable store sales up 15%. Men's apparel and accessories also performed well, with comparable store sales up 6%. Our Footwear business improved, primarily driven by sales of men's footwear, with a comparable store sales increase of 4%. Our worst performing merchandise category was Women's, with negative comparable store sales of approximately 6%. Geographically, our best performing areas were Riverside and San Bernardino counties in California, Dallas, TX, Las Vegas, NV and Los Angeles, CA with comparable store sales in the range of low double-digit to high teens. Operating areas in Tucson, AZ, Albuquerque, NM and Oregon were the poorest with comparable store sales in the range of negative mid single-digit to negative low teens."

Mr. Fields concluded, "We ended November in a strong inventory position, with average store inventories up approximately 12% over last year. We will receive the balance of our fall and holiday goods this week and be in position to do business through the Christmas season. We continue to expect comparable store sales for our fourth quarter to be positive low single-digit."

We will provide a mid-month sales update for December on December 22, 2003 at 5:00 P.M. Eastern Standard Time. Those interested can access this update message at 1-888-201-9603. This message will remain available until January 19, 2004. We will release our December sales results on January 7, 2004 after the market closes, or approximately 4:00 P.M. Eastern Standard Time.

We expect to release our fourth quarter operating results on February 25, 2004 after the market closes, or approximately 4:00 P.M. Eastern Standard Time. We will host a real-time webcast presentation and live conference call to discuss our fourth quarter operating results and fiscal 2004 sales and operating results expectations, the same day at 5:00 P.M. Eastern Standard Time. To participate in the call, dial 1-800-843-7949 five minutes before the call or access the Internet at www.factory2-u.com. All shareholders and other interested parties are encouraged to participate. A replay of the call will remain available for 48 hours by telephone or on the Internet through March 10, 2004. You may also obtain a transcript of the call by contacting Kehoe, White & Co., Inc. at 1-562-437-0655.

FACTORY 2-U STORES, INC. operates 243 "Factory 2-U" off-price retail stores which sell branded casual apparel for the family, as well as selected domestics and household merchandise at prices which generally are significantly lower than the prices offered by its discount competitors. The Company operates 32 stores in Arizona, 2 stores in Arkansas, 65 stores in southern California, 63 stores in northern California, 1 store in Idaho, 8 stores in Nevada, 9 stores in New Mexico, 1 store in Oklahoma, 14 stores in Oregon, 34 stores in Texas, and 14 stores in Washington.

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, and actual results could differ materially from the Company's present expectations. Among the important factors that could cause actual results to differ materially from those indicated in the forward-looking statements are: customer demand and trends in the off-price apparel industry, the effect of economic conditions, the impact of competitive openings and pricing, supply constraints or difficulties, and other risks detailed in the Company's Securities and Exchange Commission filings.