Cache Reports 4 Percent Comparable Store Sales Decrease in June 2004; Reiterates Comfort with Earnings Guidance

Business Wire, July 8, 2004

NEW YORK -- Cache Inc., (NASDAQ: CACH), a specialty chain of women's apparel stores with 270 stores open, reported June 2004 sales figures.

Comparable Store Sales: (sales for stores open at least one year or more)

--Decreased 4% during the five week June 2004 period compared to an increase of 12% in the year ago period, which was the greatest monthly comparable store sales gain during the Company's Fiscal 2003 year;

--Increased 3% during the 13 week period ended June 26, 2004, as compared to the same period in 2003; and

--Increased 7% during the 26 week period ended June 26, 2004, as compared to the same period in 2003.

Total Sales:

--Increased $305,000 or 2% to $18.3 million for the five week period ended June 26, 2004;

--Increased $5.3 million or 9% to $61.4 million for the 13 week period ended June 26, 2004; and

--Increased $14.3 million or 14% to $118.6 million for the 26 week period ended June 26, 2004.

Mr. Brian Woolf, Cache's Chairman commented: "While we were disappointed with our June comparable store sales decline of 4%, our margins remained strong and as such, we are reconfirming our previously issued second quarter and full year Fiscal 2004 earnings guidance. As we begin July, our sportswear business has performed well while our dress business has become more difficult, principally due to a reduction in clearance inventory, as compared to a year ago. This has positive implications for our margins, but mainly due to the reduction in dress inventory it could make for a difficult sales comparison in July. As a result, we currently expect July comparable store sales to range between minus 3% to flat, as compared to an increase of 9% in July 2003."

The Company also noted that it remains comfortable with its second quarter diluted earnings per share guidance range of $0.39 - $0.41 on a pre-split basis and $0.26 - $0.27 on a split adjusted basis. This compares to actual second quarter Fiscal 2003 diluted earnings per share of $0.37 on a pre-split basis and $0.25 adjusted for the 3-for-2 stock split that became effective on June 18, 2004. In addition, the Company indicated further that it remains comfortable with its full-year Fiscal 2004 diluted earnings per share guidance range of $1.34 to $1.38 on a pre-split basis and $0.89 to $0.92 post split. This compares to actual Fiscal 2004 diluted earnings per share of $1.13 on a pre-split basis and $0.75 post split.

During the 13-week period, the Company opened 13 new Cache stores, including a street location in Lake Tahoe with plans to open additional street locations going forward. The Company also opened its first new Lillie Rubin prototype store located in the Twelve Oaks Mall in Novi, Michigan during June. In total, the Company currently operates 270 stores, including 241 Cache and 29 Lillie Rubin locations.

June Cache Store Openings Included:

--The Oaks Mall in Gainesville, Florida;

--Mall St. Vincent in Shreveport, Louisiana;

--Alderwood Mall in Lynnwood, Washington

--North County Mall in Escondido, California; and

--The Shops at Heavenly Village in South Lake Tahoe, California

For the year-to-date period, the Company has opened 18 new stores and has closed three stores in Fiscal 2004 and expects to open another approximately 15-20 Cache and 10 Lillie Rubin stores for a total of approximately 45 new stores in Fiscal 2004.

Certain matters discussed within this press release may constitute forward-looking statements within the meaning of the federal securities law. Although Cache, Inc. believes the statements are based on reasonable assumptions, there can be no assurance that these expectations will be attained. Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation, industry trends, merchandise trends, competition and the ability to obtain financing, as well as other risks outlined from time to time in the filings of Cache, Inc. with the Securities and Exchange Commission.

For further information contact Thomas E. Reinckens, President, Chief Operating Officer, Cache, Inc., 1440 Broadway, New York, New York 10018, (212) 575-3246.