Non-GAAP Diluted Earnings Per Share Above Guidance Range

Charlotte Russe Holding, Inc. (Nasdaq: CHIC) today announced preliminary financial results for the second quarter of fiscal 2009 ended March 28, 2009.

Second quarter net sales increased 3.3% to $191.2 million compared to $185.1 million in the prior year period. Comparable store sales for the period declined 8.0%, in line with prior guidance of a mid- to high-single digit decline, and versus a comparable store sales increase of 2.5% in the second quarter of fiscal 2008. Diluted loss per share is expected to be in the range of $(0.06) to $(0.03)¹, which compares to diluted earnings per share of $0.17 in the second quarter of fiscal 2008, or $0.19 per diluted share on a non-GAAP basis after excluding an impairment charge in the period of $0.8 million.

Non-GAAP diluted earnings per share for the second quarter of 2009 are expected to be in the range of $0.02 to $0.05¹ after excluding anticipated expenses for cash charges in the range of $1.4 million to $1.6 million related to proxy solicitation, management transition and severance, as well as costs associated with the review of strategic alternatives and subsequent sale process, and a non-cash charge in the range of $1.5 million to $1.7 million for store impairment. This compares to the Company’s prior guidance of a non-GAAP diluted loss per share in the range of $(0.20) to $(0.10), exclusive of these anticipated expenses.

The preliminary results are primarily attributable to better than expected gross margin performance, as well as careful expense control. Comparable store inventories were down 18.4% at the end of the period. As of March 28, 2009, the Company had no long-term debt and expects its quarter-end cash balance to be in the range of $49 million to $52 million.

John D. Goodman, Chief Executive Officer, stated, “We are pleased to report better than expected preliminary earnings results despite the difficult retail climate and the negative impact of the Easter shift. The results reflect our actions to control inventories, limit promotional activity and generate improved full-price sell through. While the macro environment continues to present significant challenges, we are staying focused on our core strategies to drive improvement in the business. These include brand positioning, merchandise assortments, inventory optimization, real estate and capital utilization. Our Charlotte Russe team is working diligently to execute our plans and achieve our goals.

“Our strategies are starting to gain traction, marked by effective planning and allocation, compelling product and merchandising, and a cohesive presentation in stores. Although we are just beginning to see improvement, we believe the opportunity for the Charlotte Russe brand is substantial and expect to build additional momentum as we approach the Fall season.”

Goodman concluded, “In today’s market environment, we are concentrating on the customer – delivering fashion-right product at a great perceived value, providing a well-edited shopping environment and communicating a distinct fashion point of view, all supported by our new marketing initiatives. We believe these actions will allow us to build increased awareness and excitement around the Charlotte Russe brand, while also driving new customers into the stores.