About Stage Stores

Stage Stores, Inc. brings nationally recognized brand name apparel, accessories, cosmetics and footwear for the entire family to small and mid-size towns and communities through 717 stores located in 35 states. The Company operates under the Bealls, Palais Royal and Stage names throughout the South Central and Southwestern states, and under the Peebles name throughout the Midwestern, Southeastern, Mid-Atlantic and New England states. For more information about Stage Stores, visit the Company's web site at www.stagestores.com.

SOURCE: Stage Stores, Inc.

Stage Stores, Inc.
Vice President, Investor Relations
Bob Aronson, 800-579-2302
baronson@stagestores.com

Gough Grubbs, senior vice president of distribution and logistics for Stage Stores, said: "We are very excited about our new partnership with Velocity Express. We believe that Velocity's extensive network across our regions, strength of their retail management team, and their retail IT platform make them an excellent long-term partner."

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Jim Scarborough, Chairman and Chief Executive Officer, commented, "Our first quarter results are a reflection of the currently challenging economic and retail environment. Ongoing price increases for gasoline and groceries, continuing turmoil in the housing market, and job uncertainty clearly dampened the mood of the consumer, leading to the shortfall in our first quarter sales and earnings vs. last year.

"We are proud of the way that our associates have responded to these challenges during these uncertain economic times by carefully managing inventory levels and expenses, while continuing to provide exceptional service to our customers. As a result of our tightened inventory management practices, we ended the quarter with inventories on a comparable store basis down 4.8% compared to last year's levels.

"During the quarter, we made progress on a number of our strategic initiatives. We opened 23 new stores, relocated 5 stores, and expanded 2 stores. We also completed the installation of 17 new Estee Lauder counters and 14 new Clinique counters. Our efforts to grow our cosmetics business yielded positive results as this category achieved a comparable store sales increase of 12.9% during the period.

"As we enter the second quarter, we believe that our inventories are at appropriate levels and we are pleased with our merchandise assortments. We plan to open 5 new stores during the quarter, 2 of which will be in Idaho, our 36th state. We also plan to complete the installation of 6 additional Estee Lauder and 2 additional Clinique counters. Lastly, we look forward to the July opening of our third distribution center, which is located in Jeffersonville, Ohio. This new distribution facility will play an important role in supporting our ongoing unit growth and geographic expansion," Mr. Scarborough concluded.

FISCAL 2008 - SECOND QUARTER, SECOND HALF AND UPDATED FULL YEAR GUIDANCE

Commenting on the Company's outlook, Mr. Scarborough stated, "Certainly, for the near term, we believe that consumers will continue to face economic headwinds, and as a result, we are projecting that our comparable store sales will be down between 3.0% and 5.0% during the second quarter. Based upon easier year-over-year sales comparisons, we currently forecast that our comparable store sales will be down in the range of 1.0% to 3.0% during the second half of the year."

2nd Quarter 2008:

                                      2Q 2008 OUTLOOK   2Q 2007 ACTUAL
                                    ------------------- --------------
        Sales ($mm)                   $ 360   -   $ 368        $ 359.2

        Net Income ($mm)              $ 6.5   -   $ 8.9        $   9.9

        Diluted EPS                   $0.17   -   $0.23        $  0.23

        Diluted Shares (m)                38,925                43,373

2nd Half 2008:

                                      2H 2008 OUTLOOK   2H 2007 ACTUAL
                                    ------------------- --------------
        Sales ($mm)                   $ 852  -    $ 870        $ 828.2

        Net Income ($mm)              $31.7  -    $37.1        $  34.1

        Diluted EPS                   $0.81  -    $0.95        $  0.82

        Diluted Shares (m)                39,040                41,360

FY 2008:

                                     FY 2008 OUTLOOK    FY 2007 ACTUAL
                                  --------------------- --------------
        Sales ($mm)               $1,566   -     $1,591       $1,545.6

        Net Income ($mm)          $ 40.5   -     $ 48.2       $   53.1

        Diluted EPS               $ 1.04   -     $ 1.24       $   1.24

        Diluted Shares (m)               38,960                 42,720

-- FY 2007 results include a non-comparable gain of $0.04 per diluted share related to the March 2004 sale of the Peebles private label credit card portfolio.

Conference Call Information

The Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss its first quarter results. Interested parties can participate in the Company's conference call by dialing 703-639-1173. Alternatively, interested parties can listen to a live webcast of the conference call by logging on to the Company's web site at www.stagestores.com and then clicking on Investor Relations, then Webcasts, then the webcast link. A replay of the conference call will be available online until midnight on Friday, May 30, 2008.

About Stage Stores

Stage Stores, Inc. brings nationally recognized brand name apparel, accessories, cosmetics and footwear for the entire family to small and mid-size towns and communities through 717 stores located in 35 states. The Company operates under the Bealls, Palais Royal and Stage names throughout the South Central and Southwestern states, and under the Peebles name throughout the Midwestern, Southeastern, Mid-Atlantic and New England states. For more information about Stage Stores, visit the Company's web site at www.stagestores.com.

Caution Concerning Forward-Looking Statements

This document contains "forward-looking statements". Forward-looking statements reflect our expectations regarding future events and operating performance and often contain words such as "believe", "expect", "may", "will", "should", "could", "anticipate", "plan" or similar words. In this document, forward-looking statements include comments regarding the Company's sales and earnings outlook for the second quarter and second half of the 2008 fiscal year, as well as for the full 2008 fiscal year. Forward-looking statements also include comments regarding the number of stores that the Company plans to open, and the number of Estee Lauder and Clinique counters that the Company intends to install, in the second quarter of the 2008 fiscal year. Forward-looking statements are subject to a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the "SEC") on April 1, 2008 and other factors as may periodically be described in our other filings with the SEC. Forward-looking statements speak only as of the date of this document. We do not undertake to update our forward-looking statements.

(Tables to Follow)

                          Stage Stores, Inc.
             Condensed Consolidated Statements of Income
              (in thousands, except earnings per share)
                             (Unaudited)

                                    Thirteen Weeks Ended
                       -----------------------------------------------
                             May 3, 2008             May 5, 2007
                       ----------------------- -----------------------
                        Amount  % to Sales (1)  Amount  % to Sales (1)
                       -------- -------------- -------- --------------

Net sales              $353,536         100.0% $358,244         100.0%
Cost of sales and
 related buying,
 occupancy and
 distribution expenses  257,938          73.0%  259,919          72.6%
                       -------- -------------- -------- --------------
Gross profit             95,598          27.0%   98,325          27.4%
Selling, general and
 administrative
 expenses                88,339          25.0%   82,288          23.0%
Store opening costs       2,308           0.7%      755           0.2%
Interest expense, net
 of income of $5 and
 $0, respectively         1,301           0.4%      769           0.2%
                       -------- -------------- -------- --------------
Income before income
 tax                      3,650           1.0%   14,513           4.1%
Income tax expense        1,387           0.4%    5,406           1.5%
                       -------- -------------- -------- --------------
Net income             $  2,263           0.6% $  9,107           2.5%
                       ======== ============== ======== ==============

Basic and diluted
 earnings per share
 data:

Basic earnings per
 share                 $   0.06                $   0.21
                       ========                ========
Basic weighted average
 shares outstanding      38,243                  43,507
                       ========                ========

Diluted earnings per
 share                 $   0.06                $   0.20
                       ========                ========
Diluted weighted
 average shares
 outstanding             38,919                  44,790
                       ========                ========

(1) Percentages may not foot due to rounding.

                          Stage Stores, Inc.
                Condensed Consolidated Balance Sheets
                  (in thousands, except par values)
                             (Unaudited)

                                       May 3, 2008    February 2, 2008
                                     ---------------- ----------------

               ASSETS
------------------------------------
Cash and cash equivalents            $        21,165  $        17,028
Merchandise inventories, net                 381,458          342,622
Current deferred taxes                            28               32
Prepaid expenses and other current
 assets                                       26,921           43,557
                                     ---------------- ----------------
     Total current assets                    429,572          403,239

Property, equipment and leasehold
 improvements, net                           339,389          329,709
Goodwill                                      95,374           95,374
Intangible asset                              14,910           14,910
Other non-current assets, net                 27,865           28,258
                                     ---------------- ----------------
     Total assets                    $       907,110  $       871,490
                                     ================ ================

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Accounts payable                     $       117,546  $        94,505
Current portion of debt obligations            6,250            6,158
Accrued expenses and other current
 liabilities                                  64,390           66,538
                                     ---------------- ----------------
     Total current liabilities               188,186          167,201

Debt obligations                             100,691           94,436
Other long-term liabilities                   93,978           89,007
                                     ---------------- ----------------
     Total liabilities                       382,855          350,644
                                     ---------------- ----------------

Commitments and contingencies

Common stock, par value $0.01,
 100,100 shares authorized, 55,227
 and 55,113 shares issued,
 respectively                                    552              551
Additional paid-in capital                   483,480          479,960
Less treasury stock - at cost,
 16,907 and 16,907 shares,
 respectively                               (278,167)        (277,691)
Accumulated other comprehensive loss          (1,766)          (1,766)
Retained earnings                            320,156          319,792
                                     ---------------- ----------------
     Stockholders' equity                    524,255          520,846
                                     ---------------- ----------------
     Total liabilities and
      stockholders' equity           $       907,110  $       871,490
                                     ================ ================

                          Stage Stores, Inc.
           Condensed Consolidated Statements of Cash Flows
                            (in thousands)
                             (Unaudited)


                                               Thirteen Weeks Ended
                                             -------------------------
                                             May 3, 2008  May 5, 2007
                                             ------------ ------------

Cash flows from operating activities:
  Net income                                 $     2,263  $     9,107
  Adjustments to reconcile net income to net
   cash provided by operating activities:
    Depreciation and amortization                 13,239       11,546
    Deferred income taxes                           (498)        (520)
    Stock-based compensation tax benefits            725        3,448
    Stock-based compensation expense               1,821        1,521
    Amortization of debt issue costs                  60          100
    Excess tax benefits from stock-based
     compensation                                   (431)      (3,400)
    Deferred compensation                            324            -
  Construction allowances from landlords           6,732        2,786
  Changes in operating assets and
   liabilities:
    Increase in merchandise inventories          (38,836)     (34,174)
    Decrease in other assets                      17,414       18,217
    Increase in accounts payable and other
     liabilities                                  23,588        8,909
                                             ------------ ------------
      Total adjustments                           24,138        8,433
                                             ------------ ------------
    Net cash provided by operating
     activities                                   26,401       17,540
                                             ------------ ------------

Cash flows from investing activities:
  Additions to property, equipment and
   leasehold improvements                        (27,307)     (17,888)
  Proceeds from sale of property and
   equipment                                           -           31
                                             ------------ ------------
    Net cash used in investing activities        (27,307)     (17,857)
                                             ------------ ------------

Cash flows from financing activities:
  Proceeds from (payments on):
    Borrowings under revolving credit
     facility, net                                 7,852        8,365
    Repurchases of common stock                     (476)      (9,283)
    Debt obligations                              (1,505)         (20)
    Exercise of stock options and stock
     appreciation rights                             651        4,567
    Excess tax benefits from stock-based
     compensation                                    431        3,400
    Cash dividends                                (1,910)      (2,172)
                                             ------------ ------------
    Net cash provided by financing
     activities                                    5,043        4,857
                                             ------------ ------------
Net increase in cash and cash equivalents          4,137        4,540

Cash and cash equivalents:
  Beginning of period                             17,028       15,866
                                             ------------ ------------
  End of period                              $    21,165  $    20,406
                                             ============ ============

SOURCE: Stage Stores, Inc.

Stage Stores, Inc., Houston
Bob Aronson, 800-579-2302
Vice President, Investor Relations
baronson@stagestores.com

SOURCE: Stage Stores, Inc.

Stage Stores, Inc.
Vice President, Investor Relations
Bob Aronson, 800-579-2302
baronson@stagestores.com