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Duckwall-ALCO stores reports fiscal third quarter results.

ABILENE, Kan.--(BUSINESS WIRE)--Nov. 25, 1996--Duckwall-ALCO Stores, Inc. (NASDAQ:DUCK) today announced results for the fiscal third quarter and nine months ended October 27, 1996.

Net income increased 18% to $701,000 from $593,000 in the prior year's third quarter. Net sales for the quarter were $64.9 million, a 6.7% increase over sales of $60.8 million in the third quarter of last year. Net income per share increased 13% to $0.17 per share compared with $0.15 per share in the prior year's third quarter.

For the nine months ended October 27, 1996, net income increased 19% to $2.6 million from $2.2 million. Net sales were $192.6 million, an 8.0% increase over sales of $178.3 million in the prior fiscal year. Net income per share increased 18% to $0.65 per share from $.55 per share in the prior fiscal year.

Same store sales for the third quarter decreased $2.3 million, or 4.0%, to $54.5 million from $56.8 million in the year ago third quarter. Same store sales for stores in markets where there are no competing discount stores were 2.3% lower than the prior year's quarter on sales of $31.8 million compared with $32.5 million.

Same store sales for the first nine months decreased $4.0 million, or 2.4%, to $164.9 million from $168.9 million in the year ago period. Same store sales for stores in markets where there are no competing discount stores decreased .7% on sales of $96.7 million compared with $97.3 million.

Glen L. Shank, President and Chief Executive Officer, said, "I am pleased with the overall operating results for the quarter and year-to-date. In spite of declines in same store sales, we have been able to achieve better than 18% growth in net income through improvements in our gross margins and managing our expense growth. Year-to-date, we have eliminated three major promotional circulars that, while having a negative impact on same store sales, have improved both our gross and operating margins by reducing the associated promotional markdowns and advertising costs."

Shank continued, "Activities such as these illustrate our focus on achieving bottom line growth, even at a reasonable cost to sales. We remain focused on improving same store sales, but not at a cost of buying unprofitable volume increases."

The Company completed a public offering in October 1996 in which the Company raised $13.1 million in net proceeds, including proceeds from the sale of 189,000 shares to the underwriters to cover over-allotments. Duckwall-ALCO now has 5,089,823 shares outstanding.

The Company also said plans are moving along on schedule for Duckwall-ALCO to acquire 14 Val Corporation retail locations in eastern Indiana and western Ohio. Duckwall-ALCO is assuming the leases and purchasing the fixtures in the stores. The agreement provides that the stores will be delivered to Duckwall-ALCO by January 31, 1997 and will be reformatted and restocked to open as ALCO stores prior to the end of the fiscal first quarter on May 4, 1997. This will allow Duckwall-ALCO to increase the number of announced new ALCO stores for next year from 15 to 25 and increase next year's total store openings from 30 to 40.

Duckwall-ALCO Stores Inc. is a leading regional retailer which operates 181 stores in the central United States under the names "ALCO" and "Duckwall." The Company's strategy is to target smaller markets not served by other regional or national retail discount chains and provide the most convenient access to retail shopping within each market. -0-
 Duckwall-ALCO Stores, Inc.
 Consolidated Statements of Operations
 (Unaudited)

 Three Months Nine Months
 Ended Ended
 Oct. 27, Oct. 29, Oct. 27, Oct. 29,
 1996 1995 1996 1995
 (in thousands, except per share amounts)

Net sales $64,857 $60,795 $192,631 $178,327
Cost of sales 43,201 41,115 129,006 120,254
 Gross profit 21,656 19,680 63,625 58,073

Selling, general and
 administrative
 expenses 18,661 17,108 54,126 49,992
Depreciation and
 amortization 943 794 2,732 2,291

 Total operating
 expenses 19,604 17,902 56,858 52,283

 Income from operations 2,052 1,778 6,767 5,790
 Interest expense 912 823 2,504 2,240
 Income tax 439 363 1,635 1,349

 Net income $ 701 $ 592 $ 2,628 $ 2,201

Net income per share $ 0.17 $ 0.15 $ 0.65 $ 0.55

Weighted average number
 of shares outstanding 4,148 4,027 4,071 4,016


Stores open at period end 175 150




CONTACT: Duckwall-ALCO Stores Inc.

Bryan DeCordova

Vice President Finance, Treasurer

and Chief Financial Officer

913-263-3350, ext. 286
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Date:Nov 25, 1996
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