Alco Stores' August sales fell 0.9% from a year ago to US$32.2M as same-store sales slid 4.3%; CEO says record drought constrained customer spending

ABILENE, Kansas , August 30, 2012 (press release) – ALCO Stores, Inc. (ALCS) today announced that sales from continuing operations, excluding fuel, decreased 0.9% to $32.2 million for the fiscal four-week period ended August 26, 2012, compared to $32.4 million during the same period of the prior year. On a same-store basis, excluding fuel, sales decreased 4.3% from a year earlier.

On a year-to-date basis, sales from continuing operations, excluding fuel, increased 2.0% to $266.2 million for the fiscal 30-week period ended August 26, 2012, compared to $261.0 million during the same period of the prior year. On a same-store basis, excluding fuel, sales decreased 0.8% from a year earlier.

Rich Wilson, President and Chief Executive Officer, commented, "August sales results were held back by several factors, including the slowing of consumer spending in the Midwest due to the impact of the worst drought in 50 years. This has impacted a broad swath of rural America and the majority of our store locations. In a number of our communities, Back to School shopping has shifted due to later school openings this year. In addition, we strategically chose to move some promotional spending from the August time frame to support key fourth-quarter sales initiatives."

Wilson added, "As we focus on the second half of the fiscal year, we have developed marketing plans, merchandise assortments and expense plans that will position us to navigate slow economic growth and a challenging competitive environment."

Wilson concluded, "In addition, we will be broadening our food offering to include frozen food in 153 stores during the month of October. Over the past two years, ALCO has built a loyal customer base for groceries and other daily needs. The addition of frozen meal solutions, pizza, deli meats and ice cream is a natural extension of our successful dry grocery franchise. We anticipate this significant enhancement will drive customer traffic and build average basket size."

Investor Conference Call

ALCO Stores, Inc. will host an investor conference call at 10:00 a.m. Central Time on Friday, September 7, 2012, to discuss operating results for the fiscal year's second quarter, ended July 29, 2012. The dial-in number for the conference call is 888-802-2269 (international/local participants dial 913-312-1444), and the Conference Code is 2645599. Parties interested in participating in the conference call should dial in approximately five minutes prior to 10:00 a.m. Central Time. A replay of the call will be available after 1:30 p.m. Central Time September 7, 2012, through September 12, 2012, by dialing 888-203-1112 (international/local participants dial 719-457-0820), and the Replay Code is 2645599. A replay of the call will also be available four hours after completion of the call by visiting the Investors page on the Company's website, www.ALCOstores.com.

About ALCO Stores, Inc.

ALCO Stores, Inc. is a broad-line retailer, primarily located in small underserved communities across 23 states. The Company has 216 ALCO stores that offer both name brand and private label products of exceptional quality at reasonable prices. We are proud to have continually provided friendly, personal service to our customers for the past 111 years. To learn more about the Company, visit www.ALCOstores.com.

The ALCO Stores, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5865

Forward-looking statements

This press release contains forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995 ("the Act"). Forward-looking statements can be identified by the inclusion of "will," "believe," "intend," "expect," "plan," "project" and similar future-looking terms. You should not rely unduly on these forward-looking statements. These forward-looking statements reflect management's current views and projections regarding economic conditions, retail industry environments, and the Company performance. Forward-looking statements inherently involve risks and uncertainties, and, accordingly, actual results may vary materially. Factors which could significantly change results include but are not limited to: sales performance, expense levels, competitive activity, interest rates, changes in the Company's financial condition, and factors affecting the retail category in general. Additional information regarding these and other factors may be included in the Company's 10-Q filings and other public documents, copies of which are available from the Company on request and are available from the United States Securities and Exchange Commission.

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