Fred’s Reports March Sales

MEMPHIS, Tenn.–(BUSINESS WIRE)– Fred’s Inc. (NAS: FRED) today reported sales for the five-week month of March, which ended April 6, 2013.

Fred’s total sales for the month decreased 2% to $190.4 million from $194.0 million in March 2012. Comparable store sales for the month decreased 3.0% compared with flat store sales in the same period last year.

Fred’s total sales for the first two months of fiscal 2013 decreased 1% to $349.4 million compared with $352.9 million for the same period last year. On a comparable store basis, year-to-date sales decreased 2.3% versus a 0.4% decrease for the year-earlier period.

Commenting on the announcement, Bruce A. Efird, Chief Executive Officer, said, “As we discussed during our earnings call two weeks ago, we expected that March general merchandising sales would be adversely affected by unseasonably cool weather and the timing of the Easter holiday, both of which affected two of our key reconfiguration departments, Lawn & Garden and Seasonal. The pharmacy department continued to produce strong comparable script growth, but that was offset by the ongoing brand-to-generic shift, which resulted in lower overall pharmacy sales – a trend that we will see throughout most of the year. We are optimistic about April sales as the spring seasonal sales kick in and our operational expense initiatives take hold. All of these factors were anticipated as we developed our guidance for the first quarter.”

Fred’s, Inc. operates 713 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