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Fred's Total Sales Increase 8% in June As Comparable Store Sales for the Month Rise 2.6%

Posted on: Thursday, 6 July 2006, 09:01 CDT

Fred's, Inc. (NASDAQ:FRED) today reported higher sales for the five-week fiscal month of June, which ended on July 1, 2006, and for the first five months of fiscal 2006.

Total sales for the month increased 8% to $159.9 million from $148.0 million in June last year. Comparable store sales for the month rose 2.6% versus an increase of 2.1% in the same period last year.

Fred's total sales for the first five months increased 9% to $704.3 million compared with $647.9 million for the same period of fiscal 2005. On a comparable store basis, year-to-date sales increased 2.4% versus a 2.6% gain in the year-earlier period.

Commenting on the announcement, Michael J. Hayes, Chief Executive Officer, said, "June sales results came in as expected, with recent customer buying trends continuing to drive solid sales in the basic and consumable departments and an ongoing improvement in pharmacy department sales. New stores we opened at the end of June feature our new layout and several merchandising changes. We will continue to use the new layout and mix for the balance of the new stores opened this year. These programs, together with the anniversary of significant legislative changes to the pharmacy area over the next two months, are a key part of the optimistic outlook we maintain for the remainder of fiscal 2006."

Fred's opened eight stores at the end of June along with one new pharmacy. The Company is planning to open a total of 60-70 new stores in fiscal 2006. So far this year, Fred's has opened 25 new stores and eight new pharmacies.

Fred's, Inc. operates 671 discount general merchandise stores mainly in the southeastern United States, including 24 franchised Fred's stores. 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.

Source: Business Wire

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