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Gordmans Stores, Inc. Announces Third Quarter 2012 Results

Third Quarter Net Sales Increased 8.7%; Third Quarter Diluted EPS of $0.21 Exceeded Revised Guidance

OMAHA, NE -- (Marketwire) -- 11/28/12 -- Gordmans Stores, Inc. (NASDAQ: GMAN), an Omaha-based apparel and home décor retailer, today announced results for its third quarter (thirteen weeks) and nine month period (thirty-nine weeks) ended October 27, 2012.

Third Quarter Highlights

  • Net sales increased 8.7% to $143.1 million compared to $131.6 million in the third quarter of fiscal 2011.
  • Two new stores were opened in the Denver MSA.
  • Diluted earnings per share were $0.21, which exceeded revised guidance.

Nine Month Highlights

  • Net sales increased 10.6% to $405.2 million compared to $366.3 million for the nine months ended October 29, 2011.
  • Comparable store sales increased 1.1% over the first three quarters of fiscal 2011.
  • Gross profit margin increased 20 basis points over the same period last year to 46.0%.
  • Net income increased 4.2% to $15.6 million compared to $15.0 million in the first nine months of fiscal 2011.

"Our total sales increase of 9% for the third quarter of 2012 was attributable to nine stores that we opened throughout the first nine months of the year, expanding our store base by 12%. We entered 4 new markets: Salt Lake City and Ogden, UT; Boise, ID; and Indianapolis, IN, as well as opened additional stores in Minneapolis and Denver," commented Jeff Gordman, President and Chief Executive Officer. "While our third quarter comparable store sales were slightly lower than last year, we were encouraged by the mid-single digit increase in our average sale for this timeframe and the growth in our women's and children's apparel areas. Moreover, we have a number of new initiatives in place to drive our operating performance going forward."

Third Quarter Financial Results
Net sales for the thirteen weeks ended October 27, 2012 increased 8.7% to $143.1 million from $131.6 million for the same period last year, while comparable store sales fell by 1.4%. Gross profit increased 8.5% to $64.3 million, or 44.9% of net sales, from $59.2 million, or 45.0% of net sales, in the third quarter of fiscal 2011. Selling, general and administrative expenses were $57.8 million, or 40.4% of net sales, compared to $51.4 million, or 39.1% of net sales, in the third quarter of fiscal 2011. Net income for the third quarter of fiscal 2012 was $4.0 million, or $0.21 per diluted share (based on 19.4 million weighted average shares outstanding), compared to net income of $4.7 million, or $0.25 per diluted share (based on 19.3 million weighted average shares outstanding) in the third quarter of fiscal 2011.

Nine Month Financial Results
Net sales for the thirty-nine weeks ended October 27, 2012 increased 10.6% to $405.2 million from $366.3 million for the same period last year, and comparable store sales increased by 1.1%. Gross profit increased by 11.2% to $186.5 million, or 46.0% of net sales, from $167.7 million, or 45.8% of net sales, in the prior year. Selling, general and administrative costs were $161.1 million, or 39.8% of net sales, compared to $143.1 million, or 39.1% of net sales, in the prior year. Net income increased by 4.2% to $15.6 million, or $0.80 per diluted share (based on 19.4 million weighted average shares outstanding), compared to net income of $15.0 million, or $0.77 per diluted share (based on 19.4 million weighted average shares outstanding) in the first thirty-nine weeks of fiscal 2011.

Outlook
Total sales for the fourth quarter, a fourteen week quarter compared to the thirteen week fourth quarter of fiscal 2011, are projected to be between $213 million and $215 million, reflecting sales at comparable stores that are equal to last year. The Company projects diluted earnings per share to be in the range of $0.58 to $0.61 per share (based on 19.5 million weighted average shares outstanding), compared with $0.53 in the prior year period.

For the fiscal year ending February 2, 2013, a fifty-three week fiscal year compared to fifty-two week fiscal year 2011, the Company currently expects net sales to be between $618 million and $620 million and diluted earnings per share to be in the range of $1.39 to $1.42 (based on 19.4 million weighted average shares outstanding).

Conference Call Information
A conference call to discuss third quarter financial results is scheduled for today, November 28, 2012 at 4:30 p.m. Eastern Time. The conference call will be webcast live at http://investor.gordmans.com/events.cfm. A replay of this call will be available within two hours of the conclusion of the call and will remain on the website for one year.

About Gordmans Stores, Inc.
Gordmans (NASDAQ: GMAN) features a large selection of the latest name brands, fashions and styles at up to 60 percent off department and specialty store prices every day. The wide range of merchandise includes apparel for all ages, accessories, footwear, home décor, gifts, designer fragrances, fashion jewelry, bedding and bath, accent furniture and toys. Founded in 1915, Gordmans operates 83 stores in 18 states. For more information about Gordmans, visit www.gordmans.com.

Safe Harbor Statement
Certain statements in this release are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "guidance," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding expected net sales, net income, comparable store sales, diluted earnings per share, and store expansion, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are (1) changes in consumer spending and general economic conditions; (2) our ability to identify and respond to new and changing fashion trends, guest preferences and other related factors; (3) fluctuations in our sales and profitability on a seasonal basis; (4) intense competition from other retailers; (5) our ability to maintain or improve levels of comparable store sales; and (6) our successful implementation of advertising, marketing and promotional strategies.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including other risks, relevant factors and uncertainties identified in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended January 28, 2012, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.



                   GORDMANS STORES, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in 000's except share data)

                                                 October 27,    January 28,
                                                     2012           2012
                                                 ------------  -------------
ASSETS                                             (Unaudited)
CURRENT ASSETS:
    Cash and cash equivalents                    $     32,212  $      35,413
    Accounts receivable                                 2,031          1,787
    Landlord receivable                                 7,883          9,939
    Income taxes receivable                             2,742          2,805
    Merchandise inventories                           131,151         65,335
    Deferred income taxes                               1,919          2,964
    Prepaid expenses and other current assets           3,796          5,239
                                                 ------------  -------------
        Total current assets                          181,734        123,482
PROPERTY AND EQUIPMENT, net                            45,411         34,507
INTANGIBLE ASSETS, net                                  2,013          2,078
OTHER ASSETS, net                                       2,743          2,546
                                                 ------------  -------------

TOTAL ASSETS                                     $    231,901  $     162,613
                                                 ============  =============


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable                             $     85,723  $      36,034
    Accrued expenses                                   25,466         26,464
    Current portion of long-term debt                     301            655
                                                 ------------  -------------

        Total current liabilities                     111,490         63,153
                                                 ------------  -------------

NONCURRENT LIABILITIES:
    Long-term debt, less current portion                   --            189
    Deferred rent                                      19,738         14,914
    Deferred income taxes                               6,280          6,604
    Other liabilities                                     191             30
                                                 ------------  -------------

        Total noncurrent liabilities                   26,209         21,737
                                                 ------------  -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
    Preferred stock                                        --             --
    Common stock                                           19             19
    Additional paid-in capital                         52,216         51,327
    Retained earnings                                  41,967         26,377
                                                 ------------  -------------

        Total stockholders' equity                     94,202         77,723
                                                 ------------  -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $    231,901  $     162,613
                                                 ============  =============



                   GORDMANS STORES, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        (in 000's except share data)

                          13 Weeks     13 Weeks      39 Weeks     39 Weeks
                           Ended         Ended        Ended        Ended
                        October 27,   October 29,  October 27,  October 29,
                            2012         2011          2012         2011
                        (Unaudited)   (Unaudited)  (Unaudited)  (Unaudited)
                        -----------  ------------  -----------  -----------
Net sales               $   143,072  $    131,629  $   405,232  $   366,328
License fees from
 leased departments           1,917         1,800        5,474        4,878
Cost of sales               (80,716)      (74,196)    (224,249)    (203,540)
                        -----------  ------------  -----------  -----------
Gross profit                 64,273        59,233      186,457      167,666
Selling, general and
 administrative
 expenses                   (57,763)      (51,425)    (161,147)    (143,072)
                        -----------  ------------  -----------  -----------
Income from operations        6,510         7,808       25,310       24,594
Interest expense               (118)         (148)        (366)        (455)
                        -----------  ------------  -----------  -----------
Income before taxes           6,392         7,660       24,944       24,139
Income tax expense           (2,397)       (2,911)      (9,354)      (9,173)
                        -----------  ------------  -----------  -----------
Net income              $     3,995  $      4,749  $    15,590  $    14,966
                        ===========  ============  ===========  ===========

Basic earnings per
 share                  $      0.21  $       0.25  $      0.81  $      0.78
Diluted earnings per
 share                  $      0.21  $       0.25  $      0.80  $      0.77

Basic weighted average
 shares outstanding      19,188,340    19,070,949   19,139,880   19,109,361
Diluted weighted
 average shares
 outstanding             19,437,988    19,328,278   19,387,080   19,392,178

Company Contact:
Mike James
Chief Financial Officer
(402) 691-4126

Investor Relations:
ICR, Inc.
Brendon Frey
(203) 682-8200

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