"While we had hoped the improved business conditions earlier in the year would be sustainable, it now appears that a definite slowdown in consumer furniture buying is occurring"
W.G. (Mickey) Holliman, Chairman and Chief Executive Officer

Furniture Brands International (FBN) announced today it expects second quarter 2004 sales and net earnings to be lower than previously expected, and second quarter net earnings per common share on a diluted basis to be in the $0.37 to $0.39 range.

W.G. (Mickey) Holliman, Chairman and Chief Executive Officer, said, "In April, we announced that order trends had been generally positive through the first quarter of 2004, with business trending stronger at our upper-end companies - Thomasville, Drexel Heritage and Henredon - though less strong at the middle price companies - Broyhill and Lane. At the same time, we said we were concerned about the effects increasing energy costs, and uncertainties in the financial markets and in international matters might have on all of our companies. Recent incoming order trends and weakened retail activity throughout our industry have borne out these concerns.

"Notwithstanding the strong order activity in the first quarter and highly successful results from the April Home Furnishings Market, we have recently seen substantially weaker demand levels at each of our operating companies. While we had hoped the improved business conditions earlier in the year would be sustainable, it now appears that a definite slowdown in consumer furniture buying is occurring. We currently expect second quarter 2004 shipments to be modestly below year-ago levels, and we project diluted net earnings per common share of $0.37-$0.39 in the second quarter, down from the $0.44 to $0.48 guidance given at the end of April. Both our current and our earlier guidance include the previously-announced approximately $0.04 per share costs attributable to the closing of two facilities at Drexel Heritage. Those plant closings are now underway and they should be substantially concluded by the end of the current quarter."

Mr. Holliman concluded, "Furniture Brands has been and continues to transition itself, both in sourcing and in the realignment of its distribution, gaining greater control in both cases. We will continue our efforts, including the rationalization of our domestic manufacturing, to position the company for the longer term to achieve future sales and earnings growth objectives."

"We will provide guidance with respect to the third quarter of this year at the time of the issuance of our second quarter results on July 28, 2004."