Cost Plus Updates Third Quarter Sales and Earnings Guidance

Oakland, CA — October 15, 2004 — Cost Plus, Inc. (Nasdaq:CPWM) today indicated that based on results thus far in its fiscal third quarter, total sales for the quarter should approximate $188 million, which would be a 10.6% increase over last year, compared to prior guidance of $195 million to $197 million. Further, the Company estimates same store sales for the third quarter will be flat to a 1% decrease compared to the prior year. Earlier guidance called for a same store sales increase of 2% to 3%.

The Company now expects net earnings for the third quarter of approximately zero vs. prior guidance of $0.05 to $0.06 per diluted share.

The Company believes that a significant decrease in the inventory level of certain non-beverage consumable product categories caused by inaccurate sales projections could reduce sales that had been anticipated by approximately $3 million for the quarter. Replenishment orders for the affected products have been accelerated, and inventories for those products should approach normal levels before the end of the quarter.

In addition, the Company estimates the hurricanes in the Southeastern United States reduced total sales by more than $1 million, due to both temporary store closures and the delayed openings of two new stores.

Finally, sales performance and transaction count, particularly since late September, have been below expectations, and the trends continue to be inconsistent.

The Company’s third quarter ends Saturday, October 30, 2004 and final quarterly sales results will be announced Thursday, November 4, 2004. The Company will report third quarter results and update fourth quarter 2004 guidance on Friday, November 19, 2004.

The above statements relating to anticipated third quarter financial results are “forward-looking statements” that are based on current expectations and are subject to various risks and uncertainties that could cause actual results to differ materially from those forecasted. Such risk factors include, but are not limited to: general economic conditions, delays in the flow of merchandise, the timing and level of markdowns, competitive factors, changes in fuel and other shipping costs, labor market fluctuations, international conflicts, further terrorist activities, and unseasonable weather conditions.

Contact: Murray Dashe
(510) 893-7300
or
John Luttrell
(510) 808-9119