Fred's Reports January Sales

  Fred's Reports January Sales

Business Wire

MEMPHIS, Tenn. -- February 6, 2014

Fred's Inc. (NASDAQ: FRED) today reported sales for the four-week month of
January and 52-week fiscal year 2013, which ended February 1, 2014, versus
five-week month and 53-week year-earlier periods.

On an unadjusted basis, Fred's total sales for January 2014 were $134.8
million compared with $173.5 million for the five-week year-earlier period. On
an unadjusted basis, fourth quarter total sales were $495.1 million compared
with $533.4 million for the year-earlier quarter. Total sales for 52-week
fiscal 2013 were $1.939 billion versus $1.955 billion for 53-week fiscal 2012.

To make the January sales results for 2013 comparable with those of the prior
year, the Company eliminated the first week of the month, quarter and year in
2012 to make similar four-, 13- and 52-week periods. On this adjusted basis,
total sales decreased 1.1% for January, increased 0.5% for the fourth quarter,
and increased 1.4% for fiscal 2013. On an adjusted basis, comparable store
sales decreased 1.8% in January versus flat comparable store sales in the
year-earlier period. The fourth quarter comparable store sales, on an adjusted
basis, increased 0.1% compared with a decrease of 2.8% in the prior-year
period. On an adjusted basis, comparable store sales for fiscal 2013 increased
0.6% versus a decrease of 1.4% for fiscal 2012.

Commenting on the announcement, Bruce A. Efird, Chief Executive Officer, said,
"The weather was a significant challenge for us in January. It not only
disrupted consumer shopping patterns, but also resulted in more than 120 store
closings during the final week of the month. Prior to the last week of
January, sales were running in the mid-range of our forecast, with
reconfiguration departments leading the way. In the final week of the month,
comparable store sales dropped into the negative double digits, culminating in
a weather effect on comparable store sales for all of January that is
estimated at more than 300 basis points."

Efird noted that lower-than-anticipated sales in the last week of January will
reduce earnings for the final quarter of 2013 by approximately $0.03 per
share. Fred's now expects to report fourth quarter earnings per diluted share
in the range of $0.13 to $0.16 cents versus earnings of $0.15 per diluted
share for the comparable 13-week period last year.

"With January closing out the fourth quarter, we had success in several areas,
most notably in our reconfiguration departments that include pharmacy, pet,
auto, and hardware, which will carry forward in 2014," Efird continued. "We
are also in the process of revamping our fourth quarter marketing, promotion
and pricing strategies to respond to changing consumer buying habits, along
with the increasing popularity of internet shopping. We are confident that our
strategies to build a strong presence in specialty pharmacy and clinical
services, together with accelerating pharmacy acquisitions and new pricing,
promotion and marketing programs, will lead to continued success in 2014."

During January, Fred's opened one new store and two Xpress pharmacies. For the
year, Fred's added a net total of 25 new locations, consisting of 11new
stores and 14 new Xpress pharmacies, which was offset by the closing of 25
store locations and eight Xpress pharmacies. The Company also opened 26 new
pharmacies in 2013 and closed 17, for a net addition of nine pharmacies during
the year.

Fred's, Inc. operates 704 discount general merchandise stores, including 21
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 that 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.

Contact:

Fred's Inc.
Jerry A. Shore, 901-362-3733, Ext. 2217
Executive Vice President and
Chief Financial Officer
 
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