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ERNST HOME CENTER INC. ANNOUNCES FIRST QUARTER RESULTS

SEATTLE, March 8 /PRNewswire/ -- Ernst Home Center, Inc. (Nasdaq: ERNS) today announced sales and operating results for the first quarter of fiscal 1996 which ended January 27, 1996. Sales for the quarter were $123.5 million, up 1.0 percent from the same period of 1995. Comparable store sales (sales from stores open more than one year, including stores replaced by new stores) for the quarter were down 15.9 percent over last year.

The sales increase on a total basis was a result of the increase in the number of stores open at period end. The comparable store results were due to several factors including increased competition, a slowdown in home improvement store activity and a general weakness in the overall retail environment, short-term inventory availability, and the maturation cycle of the Company's previously announced accelerated merchandise differentiation strategy which is in its early stages.

The Company has raised its credit facilities to $100 million and is currently stocking its stores for the Spring and Summer seasons. The Company believes that the strategic actions taken in the last six months should allow Ernst to better compete in the face of increasingly competitive industry conditions and a difficult economic environment.

As previously announced, and as part of the strategic positioning, the Company closed nine stores in the first quarter, plans to close one store in the fourth quarter of 1996, and not open two stores that were scheduled to open in the Spring of 1996. These store closings and planned store closure resulted in a one-time charge in the first quarter of $34.0 million.

For the quarter ended January 27, 1996, the pre-tax loss before the one-time charge for the store closings was $15.2 million compared to a pre-tax loss of $1.5 million in the first quarter of fiscal 1995. Including the effect of the store closings, the Company reported a net loss for the quarter of $49.2 million, or $4.02 per share, compared to a net loss of $959,000, or $0.08 per share, for the first quarter last year.

Ernst Home Center Inc., based in Seattle, Washington, is a major home improvement retailer operating stores in Washington, Oregon, California, Idaho, Montana, Utah, Nevada, Colorado, and Wyoming.
 ERNST HOME CENTER, INC.
 CONSOLIDATION STATEMENTS OF OPERATIONS
 (dollars in thousands, except per share data)
 (Unaudited)
 Three Months Ended
 January 27 January 28
 1996 1995
 (13 weeks) (13 weeks)
 Sales $ 123,574 $ 122,339
 Cost of merchandise sold 87,401 84,036
 Gross Profit 36,173 38,303


Selling, general and
 administrative expenses 46,212 36,226
 Reserve for store closures 34,000 --
 Store closing expenses 153 945
 Store pre-opening expenses 1,649 812
 Operating income (loss) (45,841) 320
 Interest expense, net 3,399 1,842
 Loss before income taxes (49,240) (1,522)
 Income tax benefit -- (563)
 Net loss $ (49,240) $ (959)
 Net loss per common share $ (4.02) $ (0.08)


Weighted average number of
 common shares outstanding 12,259,000 12,259,000
 -0- 3/8/96


/CONTACT: Jim Fox, VP, of Ernst Home Center, Inc., 206-621-3656; or Douglas Sherk, Chris Danne or Todd Friedman, 415-296-7383, or Stacey Herschaft or Ellissa Grabowski, 212-850-5600, all of Morgen-Walke Associates, for Ernst Home Center/

(ERNS)

CO: Ernst Home Center Inc. ST: Washington IN: REA SU: ERN

SM-MS -- SFF010 -- 1738 03/08/96 17:13 EST
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Date:Mar 8, 1996
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