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CONTACT: FRED'S REPORTS SALES FOR FEBRUARY 2007 COMPARABLE STORE SALES INCREASE 3.9% MEMPHIS, Tenn. (March 8, 2007) ñ Fred's Inc. (NASDAQ:FRED) today reported record sales for the four-week fiscal month of February, the first month of fiscal 2007, which ended March 3, 2006, versus the four-week period last year that ended Febraury 25, 2006. Fred's total sales for the month rose 8% to $143.9 million from $133.4 million in February 2006. Comparable store sales for the month increased 3.9% versus 0.3% in the same period last year. Commenting on the announcement, Michael J. Hayes, Chief Executive Officer, said, "We are pleased to begin our new fiscal year with a solid start. February sales reflected an ongoing improvement in the performance of our general merchandise departments, driven by a very good response to our end-of-month circular and a resulting increase in customer traffic. We are gratified to open fiscal 2007 with this momentum, and we remain confident that our operational and marketing initiatives planned for the year will show a positive impact on our future performance." In February, Fred's opened three new stores, closed three stores, and began its refresher program, which will encompass over 500 stores. In 2007, the Company plans to open approximately 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 701 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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