Fred's Comments on Recent Decline in Share Price; Continues to Expect EPS of $0.19 to $0.22

Commenting on the decline in share price over the past two days, Fred's, Inc. FRED today said that trends in its business and store operations remain consistent with those expressed in monthly sales releases for January and February. Additionally, next Thursday, March 24, 2011, the Company plans to announce results for the fourth quarter and year ended January 31, 2011.

Management continues to expect reported earnings to be in line with the guidance issued for the periods on February 2, 2011, which included earnings per share for the fourth quarter in the range of $0.19 to $0.22 and growth in 2010 earnings of 24% to 29%, equivalent to earnings per share of $0.73 to $0.76 for the full year. Therefore, in light of the decline in its share price, the Company intends to resume share repurchases under its previously announced stock repurchase program.