NEW YORK, Jun 5, 2002 (BUSINESS WIRE) -- Candie's, Inc. (NASDAQ:CAND):

     -- Company Reports 1Q EPS of $0.05 vs. Guidance of $0.02 --
     -- Raises EPS Guidance to $0.47 to $0.50 for Fiscal 2003 --

Candie's, Inc. (NASDAQ: CAND) today announced operating results for the first quarter ended April 30, 2002.

Net revenues for the quarterly period increased 7.4% to $25.6 million versus $23.9 million in the year-ago quarter. Sales through the Company's 14 retail stores increased 31.1% to $2.1 million, and licensing revenues for the period were $1.4 million.

Gross profit margin for the first quarter was 31.3%, versus the prior year's level of 32.1%, due to a higher level of clearance activity in the period vs. the year-ago quarter. The Company's SG&A expenses, as a percentage of net revenues, decreased 130 basis points to 27.6% versus 28.9% in the year-ago quarter. SG&A expenses increased only 2.6% year-over-year, primarily from the opening of new retail stores. The company recorded first quarter operating profit of $953,000 versus $718,000 last year.

Net income during the quarter nearly tripled, to $1.1 million versus $393,000 in the year-ago period. The company reported fully diluted earnings per share for the first quarter of $0.05 versus $0.02 in the first quarter of the prior year.

Neil Cole, Candies, Inc.'s Chief Executive Officer, said, "We are pleased to be off to a strong start this year. All of the trends we watch, both within our business, as well as in the wider market, seem to be moving in the right direction. Further, the level of acceptance of the Candies and Bongo product lines, as evidenced by strong sell-through data, is clearly very high. While the first quarter does not include results from our recent acquisition of Unzipped Apparel, that business performed very well during the quarter and has good momentum. We are extremely excited about the back half of the year as well as in our long-term prospects."

Candies, Inc. also today updated financial guidance for the fiscal year ended January 31, 2003. The company believes that it is likely to report net revenues, including 9 months of contribution from Unzipped Apparel, in the range of $160 million to $170 million and earnings per fully-diluted share of between $0.47 and $0.50. For the second quarter, ending July 31, 2002, the company is reiterating its guidance and expects to report sales in the range of $50 to $52 million and earnings in the range of $0.18 to $0.22. The company continues to believe that long-term goals for sales and earnings growth of approximately 20% are appropriate and achievable targets.

About Candie's, Inc.

Candie's Inc. is a leading designer and marketer of young women's footwear, apparel and accessories. The Company distributes its products, under the Candies and Bongo brand names, through better department and specialty stores nationwide, as well as through 14 company-owned stores and specialty stores internationally. Candie's also arranges for the manufacture of footwear products for mass market and discount retailers under the private label brand of the retailer or other trademarks owned or licensed by Candie's. Additionally, the Candie's brand is licensed for the manufacture, sale and distribution of apparel, fragrances and cosmetics, handbags, sunglasses, watches and cell phone accessories. Candie's Inc. operates its website at www.candies.com. For investor information please visit the corporate web site at www.candiesinc.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. The statements which are not historical facts contained in this press release are forward looking statements that involve a number of known and unknown risks, uncertainties and other factors all of which are difficult or impossible to predict and many of which are beyond the control of the Company, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors include, but are not limited to the risks detailed in the Company's Securities and Exchange Commission filings, and uncertainty associated with the impact on the Company in relation to recent events discussed in the Company's Form 10-K for Fiscal 2002. The words "believe", "expect", "anticipate", "seek" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward looking statements.

                            Candie's, Inc.
      Condensed Consolidated Statements of Operations (Unaudited)
                (000's omitted, except per share data)
                                             Three Months Ended
                                                  April 30,
                                           2002              2001
                                      --------------------------------
Net sales                              $ 24,190          $ 22,652
Licensing income                          1,427             1,202
                                      --------------------------------
Net revenue                              25,617            23,854
Cost of goods sold                       17,587            16,187
                                      --------------------------------
                                          8,030             7,667
Selling, general and
 administrative                           7,062             6,884
Special charges                              15                65
                                      --------------------------------
                                          7,077             6,949
                                      --------------------------------
Operating income                            953               718
Other expenses:
  Interest expense - net                    277               325
  Equity (income) in joint venture         (250)                -
                                      --------------------------------
                                             27               325
                                      --------------------------------
Income before income taxes                  926               393
(Benefit) for income taxes                 (139)                -
                                      --------------------------------
Net income                              $ 1,065             $ 393
Earnings per share:
    - Basic                              $ 0.05            $ 0.02
    - Diluted                            $ 0.05            $ 0.02
Weighted average number
 of common shares:
    - Basic                              20,647            19,135
    - Diluted                            23,109            22,392