Fred's Reports Higher March Sales

Fred's Inc. (NASDAQ: FRED) today reported sales for the five-week month of March and the two-month year-to-date period ended April 4, 2015.

Fred's total sales for March increased 0.3% to $191.7 million from $191.0 million in March 2014. Fred's total sales for the prior year reflected the net closing of 62 locations in 2014 pursuant to the Company's reconfiguration plan. Excluding last year's March sales of $8.4 million from those closed locations, total sales increased 5% for the month. Comparable store sales for the month increased 1.9% compared with a decrease of 1.2% in March of last year.

Fred's total sales for the first two months of fiscal 2015 decreased 1% to $344.9 million compared with $348.5 million for the same period last year. Once again, excluding sales of $15.8 million from closed stores for the comparable two-month year-to-date period in 2014, total sales increased 4% for the same period in 2015. On a comparable store basis, year-to-date sales increased 0.9% versus a 1.7% decrease for the year-earlier period.

Commenting on the announcement, Jerry A. Shore, Chief Executive Officer, said, "We are pleased that March sales were at the high end of our guidance, as expressed in our recent year-end conference call. We ended the month with strong Easter product sales in toys, candy, and giftware, and our pharmacy department continued to post strong revenue and comparable script growth in March. At the same time, we were negatively affected in spring seasonal and Lawn & Garden product categories due to the port strike and wet weather during March. We expect that these sales will rebound in the upcoming months as spring merchandise is received.

"With the management team now in place, we expect to continue strengthening our general merchandise business going forward," Shore continued. "Additionally, the pharmacy team is working toward the completion of our recently announced acquisition of EntustRx specialty pharmacy operation and Reeves-Sain Drug Store, and integrating its resources and experience throughout our pharmacy operations."

Fred's operates 661 discount general merchandise stores, including 19 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. A reader can identify forward-looking statements because they are not limited to historical facts or they use such words as "outlook," guidance," "may," "should," "could," "believe," "anticipate," "plan," "expect," "estimate," "forecast," "goal," "intend," "committed," "continue," or "will likely result" and similar expressions that concern the Company's strategy, plans, intentions or beliefs about future occurrences or results. These risks and uncertainties include, but are not limited to, those associated with the Company's announced strategic plan, the ultimate terms of the reworked pharmacy distribution agreement, lease buyouts and the underlying assumptions and projections upon which they are based, as well as risks that intended results may not be achieved or may not occur as quickly as expected; the success of announced acquisition activities and future growth trends in businesses acquired; 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 the factors listed under "Risk Factors" in the Company's most recent Annual Report on Form 10-K and any subsequent quarterly filings on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made. 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.