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CONTACT: FRED'S REPORTS MAY SALES MEMPHIS, Tenn. (June 7, 2007) – Fred's Inc. (NASDAQ:FRED) today reported record sales for the four-week fiscal month of May, which ended June 2, 2007, versus the four-week period last year that ended May 27, 2006. Fred's total sales for the month rose 4% to $132.2 million from $127.5 million in May 2006. Comparable store sales for the month increased 0.2% versus an increase of 2.4% in the same period last year. Total sales for the first four months of fiscal 2007 increased 5% to $574.5 million compared with $544.7 million in the year-earlier period. On a comparable store basis, year-to-date sales increased 1.5% versus the same period last year, when Fred's posted a 2.3% gain in comparable store sales. Commenting on the announcement, Michael J. Hayes, Chief Executive Officer, said, "We expected May sales to be at the low end of our projected range because of our decision not to run a pre-Memorial Day circular, which reduced the number of advertising days in the month by four, along with the disruptive effects on our stores from the refresher program. We are pleased to report that one phase of the program was completed in May with the expansion and resetting of our stationery department. Overall, May performed according to our financial budgets. "We have forecasted June sales toward the higher end of our plan," Hayes continued. "We anticipate that positive customer response to our refresher program will help build sales momentum as more stores are completed and as we get the benefit of additional advertising days in June." During May, Fred's opened two new stores and two pharmacies. The Company also closed one store. In 2007, Fred's plans to open 35 to 40 new stores, 15 to 25 new pharmacies, and expects to close 20 to 25 stores, netting growth in selling square footage in the range of 1% to 3% for the year. Fred's Inc. operates 701 discount
general merchandise stores, including 24 franchised Fred's stores in the
southeastern 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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