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CONTACT: FRED'S MARCH SALES INCREASE 9% MEMPHIS, Tenn. (April 10, 2007) – Fred's Inc. (NASDAQ:FRED) today reported record sales for the five-week fiscal month of March, which ended April 7, 2007, versus the five-week period last year that ended April 1, 2006. Fred's total sales for the month rose 9% to $172.2 million from $158.2 million in March 2006. Comparable store sales for the month increased 4.4% versus 1.0% in the same period last year. Fred's total sales for the first two months of fiscal 2007 also increased 9% to $316.1 million compared with $291.0 million for the same period last year. On a comparable store basis, year-to-date sales increased 4.1% compared with 0.7% in the year-earlier period. Commenting on the announcement, Michael J. Hayes, Chief Executive Officer, said, "We are pleased to see our stronger momentum in comparable store sales carry forward from February into March, reflecting positive customer traffic and the ongoing traction we are getting from our marketing and operational initiatives. Although we know that April sales will be negatively affected by an earlier Easter holiday this year, we like what we see in our business so far this year and remain comfortable with our overall sales estimates for the quarter." In March, Fred's opened two new stores and closed four stores. In 2007, the Company plans to open 35 to 40 new stores, 15 to 25 new pharmacies, and expects to close certain stores, netting growth in selling square footage in the range of 1% to 3% for the year. Fred's Inc. operates 699 discount general merchandise stores, including 24 franchised Fred's stores in the southeastern United States. For more information about the Company, visit Fred's Website at www.fredsinc.com. Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, general economic trends, changes in consumer demand or purchase patterns, delays or interruptions in the flow of merchandise between the Company's distribution centers and its stores or between the Company's suppliers and same, a disruption in the Company's data processing services, costs and delays in acquiring or developing new store sites, and other contingencies discussed in the Company's Securities and Exchange Commission filings. Fred's undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
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