HKF Hancock Fabrics

Hancock Fabrics, Inc. (NYSE: HKF), today reported that sales in the five-week period ended July 1, 2006 totaled $33.0 million compared with $31.4 million in the same period of the prior year. Sales in comparable stores increased 6.2% in June. In the first two months of the second quarter, total sales were $60.3 million versus $57.3 million in the same period of fiscal 2005, and comparable store sales were up 6.1%. Year-to-date, total sales were $153.9 million in 2006 and $155.1 million in 2005. Comparable store sales, for the five months to date, declined 0.6%, including a 5.5% benefit from stores that are being liquidated in connection with store closing sale events. Hancock Fabrics, Inc. - America's Fabric Store - is committed to serving creative enthusiasts with a complete selection of fashion and home decorating fabrics, sewing accessories, needlecraft supplies and sewing machines. The Company operates 429 retail stores in 41 states and an Internet store at www.hancockfabrics.com.