Richard Wilson, President and CEO, commented, "The Company's second quarter results were impacted by the severe drought which affected the majority of our trading area and the agricultural business in the Midwest. Our second quarter earnings were also negatively impacted due to increased expenses relating to a shift of the store inventory process into the second quarter from the third quarter, new store expenses, and a one-time expense relating to a supply chain study. The Company's gross margin rate expanded by 30 basis points due to better pricing disciplines and the initial impact of our new regional pricing initiative. For the second quarter of fiscal 2013, gross margin dollars grew by 1.9% and margin rate increased to 32.7%. On a year-to-date basis, gross margin dollars grew by 2.7% with an improved margin rate of 31.2%."

Wilson concluded; "We expect improved results in the second half of the year from new initiatives in both Hardlines and Softlines, as well as the addition of frozen foods to our consumables offering beginning in October. We also expect a positive impact from the rollout of our regional merchandising strategy this fall."

Investor Conference Call

ALCO Stores, Inc. will host an investor conference call at 10:00 a.m. Central Time on Friday, September 7, 2012, to discuss operating results for the fiscal year's second quarter, ended July 29, 2012. The dial-in number for the conference call is 888-802-2269 (international/local participants dial 913-312-1444), and the Conference Code is 2645599. Parties interested in participating in the conference call should dial in approximately five minutes prior to 10:00 a.m. Central Time. A replay of the call will be available after 1:30 p.m. Central Time September 7, 2012 through September 12, 2012, by dialing 888-203-1112 (international/local participants dial 719-457-0820), and the Replay Code is 2645599. A replay of the call will also be available four hours after completion of the call by visiting the Investors page on the Company's website, .

Supplemental Data

The Company has included certain tables in this press release that are set forth fully in the Company's 10-Q.

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