KappAhl: Sales are increasing in both new and existing stores

Interim report for the Second Quarter of financial year 2006/2007

Second Quarter (December 2006 - February 2007)

  * KappAhl's net sales for the period amounted to MSEK 1,088
    (1,026), an increase of 6.0 percent.
  * Operating profit amounted to MSEK 117 (88), an increase of 33
    percent. This has been positively affected by non-recurring items
    of MSEK 13.
  * The gross margin was 57.7 percent (57.4) and the operating margin
    was 10.8 percent (8.6).
  * Profit after taxes amounted to MSEK 338 (19), which is equivalent
    to SEK 4.50 (0.25) per share. This has been positively affected
    by a tax revenue of MSEK 270.
  * Cash flow from operating activities totalled MSEK 104 (120).


CEO comments on KappAhl's second quarter results

The quarter showed continued increased sales of KappAhl's fashions.
Previously we have reported that, as of this financial year, we will
be focusing upon sales growth while maintaining our margins. The
development of the quarter is a clear consequence of this strategy.
We are above all glad for a highly successful first part to the
quarter.

We are also exceptionally proud of the continued improvement in
profits, in which we have gone from a good position to an even better
one. This is the consequence of continued sales successes and a
disciplined cost development.

In summary, KappAhl is continuing with its strategy of constant
improvements and we now present the 18th consecutive quarter of
improved profits.
Christian W. Jansson
President and CEO



For further information, please contact
Christian W. Jansson, President and CEO
  Tel. +46 (0)70 995 02 01
Håkan Westin,
CFO
Tel. +46 (0)70 471 56 64


KappAhl is a leading Nordic fashion chain with approximately 270
stores in Sweden, Norway, Finland and Poland. We design, market and
sell clothes for the entire family but focus in particular on women
between 30 and 50 years of age, shopping for the whole family.
KappAhl's head office and distribution centre, which handles the
distribution of goods to all stores, is located in Mölndal, just
outside Gothenburg. KappAhl employs approximately 3,700 individuals,
more than 90 percent of whom are women. During the financial year
2005/2006, KappAhl had sales of SEK 4.2 billion, with an operating
profit of MSEK 530. KappAhl shares are listed on the Stockholm Stock
Exchange. Further information about the company is available on
www.kappahl.com and financial information is available on
www.kappahl.com/ir.

The full report with tables can be downloaded from the following
link: