Exhibit 99.1

Contact: Walter Parks
                Chief Financial Officer
                bebe stores, inc.
                (415) 715-3900

bebe stores, inc.
Announces Record First Quarter Earnings of $0.22 per share,
a 57% Increase over the Prior Year

BRISBANE, CALIF. – October 25, 2006 – bebe stores, inc. (Nasdaq:BEBE) today announced unaudited financial results for the first quarter ended September 30, 2006.

Net sales for the first quarter of fiscal 2007 were $157.1 million, up 24.5% from $126.2 million reported for the first quarter a year ago. As previously reported, same store sales for the thirteen-week period ended September 30, 2006 increased 12.8% compared to an increase of 17.3% in the prior year.

Gross margin as a percentage of net sales increased to 50.5% in the first quarter of fiscal 2007, compared to 49.3% in the first quarter of fiscal 2006. The increase in gross margin as a percentage of net sales from the prior year of 1.2% was primarily due to improved merchandise margins resulting from a higher initial markup and lower markdowns sold.

SG&A expenses for the first quarter of fiscal 2007 were $50.3 million, or 32.0% of net sales, compared to $42.2 million, or 33.5% of net sales for the same period of the prior year. The decrease in SG&A expenses as a percent of sales is primarily due to a decrease in advertising expenses and lower variable expenses.

Operating income for the first quarter of fiscal 2007 was $29.0 million or 18.5% of net sales, compared to $20.0 million or 15.8% of net sales for the same period of the prior year. Net income for the first quarter increased to $20.4 million from $13.6 million for the same period of the prior year. Diluted earnings per share for the first quarter were $0.22 versus $0.14 per share in the same period of fiscal 2006, representing a 57.1% increase over the prior year.

The effective tax rate for the first quarter of fiscal 2007 decreased to 36.5% from 38.5% in the first quarter of fiscal 2006 primarily due to an increase in tax exempt interest income.

During the quarter ended September 30, 2006, the Company opened six stores, including one bebe store, four BEBE SPORT stores and one Neda by bebe store, and expanded or relocated two bebe existing stores resulting in total square footage growth of 2%. For the quarter ended September 30, 2006, the Company’s capital expenditures were approximately $8 million and depreciation expense was approximately $4 million.

For the second quarter of fiscal 2007, the Company anticipates comparable store sales will be in the high single digit range and earnings per share in the range of $0.31 to $0.35 versus $0.27 per share in the second quarter of fiscal 2006. The Company is currently anticipating an effective tax rate of 36.5% for the second quarter of fiscal 2007.

For the second quarter of fiscal 2007, the Company is currently planning finished goods inventory to increase on a per square foot basis in the range of mid teens as compared to the second quarter of fiscal 2006.

bebe stores, inc. will host a conference call today, October 25, 2006 at 1:30 P.M. Pacific Time to discuss first quarter results. Interested parties are invited to listen to the conference by calling (888) 241-2232. A replay of the call will be available for approximately one week by calling (800) 642-1687 and using the passcode “8185335". A link to the audio replay will be available on our web site at www.bebe.com following the conference call.

bebe stores, inc. will host an analysts’ day on October 27, 2006 at its new store in the Time Warner Center on Columbus Circle in New York City.

bebe stores, inc. designs, develops and produces a distinctive line of contemporary women’s apparel and accessories, which it markets under the bebe, COLLECTION bebe, Neda by bebe, Neda, BEBE SPORT and bebe O brand names. bebe currently operates 250 stores, of which 185 are bebe stores, 20 are bebe outlet stores, 44 are BEBE SPORT stores and 1 is a Neda by bebe store. These stores are located in the United States, Puerto Rico and Canada. In addition, there is an online store at www.bebe.com.

The statements in this news release and on our recorded message, other than the historical financial information, contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ from anticipated results. Wherever used, the words “expect,” “plan,” “anticipate,” “believe” and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties and the company’s future results of operations could differ materially from historical results or current expectations. Some of these risks include, without limitation, miscalculation of the demand for our products, effective management of our growth, decline in comparable store sales performance, ongoing competitive pressures in the apparel industry, changes in the level of consumer spending or preferences in apparel, loss of key personnel, difficulties in manufacturing, disruption of supply, adverse economic conditions, and/or other factors that may be described in the company’s annual report on Form 10-K and/or other filings with the Securities and Exchange Commission. Future economic and industry trends that could potentially impact revenues and profitability are difficult to predict.