UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                -----------------

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

        Date of report (Date of earliest event reported): March 11, 2004


                                  FRED'S, INC.
               (Exact Name of Registrant as Specified in Charter)


                         Commission File Number 00-19288

           Tennessee                                             62-0634010
  (State or other jurisdiction                               (I. R. S. Employer
of incorporation or organization)                            Identification No.)

  4300 New Getwell Road, Memphis, TN                                38118
(Address of principal executive offices)                          (Zip Code)


               Registrant's telephone number, including area code
                                 (901) 365-8880

<PAGE>


Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

         (c)           Exhibits:

           Exhibit
            Number      Description
         -------------  -------------------------------------------------------

             99.1       Press release issued by Fred's, Inc., dated
                        March 11, 2004

Item 12.  Results of Operations and Financial Condition.

         On March 11, 2004,  Fred's Inc.  issued a press  release  announcing,
among other things,  its quarterly  earnings  results for its fourth quarter and
full fiscal year ended January 31, 2004. A copy of the press release is attached
as Exhibit 99.1 to this Current Report on Form 8-K.










                                       2
<PAGE>


                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                            FRED'S, INC.
                                            (Registrant)


                                            By:  /s/ Jerry A. Shore
                                            ----------------------------
                                            Jerry A. Shore,
                                            Executive Vice President and
                                            Chief Financial Officer


March 11, 2004






                                       3
<PAGE>

                                INDEX TO EXHIBITS


   Exhibit
    Number       Description
---------------  --------------------------------------------------------------

     99.1        Press release issued by Fred's, Inc., dated March 11, 2004










                                       4
<PAGE>

                                                                   Exhibit 99.1


FRED'S                          4300 New Getwell Road, Memphis, Tennessee 38118

                                          Contact: Jerry A. Shore
                                                   Executive Vice President and
                                                   Chief Financial Officer
                                                   (901) 362-3733, Ext. 2217


              FRED'S REPORTS 22% INCREASE IN FISCAL 2003 NET INCOME
                             ----------------------

       RECORD NEW STORE OPENINGS AND SOLID COMPARABLE STORES SALES GROWTH
                    CONTINUE TO PRODUCE STRONG SALES RESULTS



MEMPHIS,  Tenn. (March 11, 2004) - Fred's Inc. (Nasdaq/NM:  FRED) today reported
record  financial  results for the fourth fiscal  quarter and year ended January
31, 2004.

     Net income for the fourth quarter of 2003 increased 21% to $13.2 million or
$0.33 per diluted  share from $10.9  million or $0.28 per  diluted  share in the
year-earlier  period. For fiscal 2003, net income increased 22% to $34.4 million
or $0.87 per diluted  share from $28.2  million or $0.72 per  diluted  share for
fiscal 2002. All per share results have been adjusted for a three-for-two  stock
split distributed on July 1, 2003.

     Retail sales by Company stores for the fourth quarter of 2003 increased 17%
and total sales for the quarter rose 16% to $378.0 million versus $325.3 million
in the same period last year. On a comparable store basis,  sales increased 5.1%
for the quarter.  For fiscal 2003,  retail sales by Company stores increased 19%
and total sales for the period rose 18% to $1.303  billion  compared with $1.103
billion in fiscal 2002.  Comparable  store sales for fiscal 2003  increased 5.7%
over the prior year.

     Commenting on the results, Michael J. Hayes, Chief Executive Officer, said,
"Fiscal  2003 was a period of  significant  growth for  Fred's,  as the  company
achieved new milestones in several key areas.  Despite the challenges  presented
by a sluggish  economy and those  inherent in our efforts to oversee rapid store
growth  and the  ramp-up of our new  distribution  center,  Fred's  fundamentals
continued to improve, producing another year of record sales and earnings. Sales
growth  for the year  reflected  the  opening of 79 new stores as well as a 5.7%
increase  in  comparable  store  sales - in line with our target  range of 5%-7%
growth.  These  sales gains  combined  with an  enhanced  gross  margin to drive
operating margins again this year and generate a 22% increase in annual earnings
and 21% higher  fourth  quarter  earnings,  matching the outlook we expressed in
early January 2004.

     "Because of the record pace of new store  openings last year,  which pushed
us past the  500-store  mark,  we recently  raised our sights for  expansion  in
fiscal 2004 and now target  between  85-100  additional new stores in the coming
year,"  Hayes  added.  "Importantly,  we also have  strengthened  our ability to
support this more rapid growth due to steadily  increasing  productivity  at our
second distribution center, which opened almost a year ago, and with the ongoing
expansion of the number of stores it supplies.  The enhanced logistics solutions
this center offers, in tandem with our distribution  center in Memphis,  enabled
us to lower  distribution costs 70 basis points as a percent of sales last year,
despite an overall  rise in  transportation  costs,  and provide a solid  supply
platform to support chain growth."


                                     -MORE-
<PAGE>

FRED Reports Fourth Quarter, Year-end Results
Page 2
March 11, 2004


     Concluding, Hayes said, "As we look ahead to fiscal 2004, we remain excited
about the  opportunities we see for continued  growth and earnings  improvement.
Our strong pharmacy department, coupled with a compelling  convenience/value/mix
offering  to  the   customer,   continues  to  provide  us  with  a  competitive
differentiation that sets Fred's apart in the marketplace.  With these strengths
in mind,  we remain  enthusiastic  about our goals of  achieving  15%-17%  sales
growth in fiscal 2004,  based on our new store  expansion  plans and an expected
overall increase of 4%-7% in comparable  store sales.  Considering this outlook,
we believe the Company is  positioned  to increase  earnings per share in fiscal
2004 to a range of $1.03 to $1.10."

     Fred's  gross  profit  for the fourth  quarter  of 2003 was $104.2  million
compared with $89.9 million in the prior-year  period,  representing an increase
of 16% for the period.  Gross margin for the quarter was 27.6%,  unchanged  from
27.6% last year.  Gross profit for fiscal 2003  increased 21% to $368.3  million
from $305.0  million  for fiscal  2002.  Gross  margin for fiscal 2003 was 28.3%
versus 27.6% last year, reflecting higher initial markup from product purchases,
increased vendor allowances and better control of shrinkage.

     Selling, general and administrative expenses for the fourth quarter of 2003
improved to 22.5% of sales from 22.7% of sales in the  year-earlier  period.  In
the quarter,  favorable productivity  improvements in distribution expenses were
offset  somewhat by  increases  in store and pharmacy  operating  expenses.  For
fiscal 2003, selling,  general and administrative expenses increased to 24.3% of
sales  compared  with 23.7% of sales in 2002.  The  increase  in  expenses  as a
percent  of sales for the  year-to-date  period  resulted  primarily  from costs
associated  with the Company's  expansion of store and  distribution  facilities
during the first three quarters of 2003.

     Operating  income for the fourth  quarter  of 2003  increased  19% to $19.1
million from $16.1 million in the year-earlier period. Operating income was 5.1%
of sales in the fourth  quarter of 2003,  up from 4.9% in the fourth  quarter of
2002. Operating income for fiscal 2003 increased 21% to $51.7 million from $42.7
million in the prior year.  Operating  income for fiscal 2003 was 4.0% of sales,
up from 3.9% of sales last year.

     Fred's Inc. operates 522 discount general merchandise stores,  including 26
franchised  Fred's stores mainly in the  southeastern  United  States.  For more
information  about  the  Company,  visit  Fred's  website  on  the  Internet  at
www.fredsinc.com.  A public, listen-only simulcast and replay of Fred's year-end
conference   call   may  be   accessed   at  the   Company's   web  site  or  at
www.fulldisclosure.com.  The simulcast  will begin at  approximately  10:00 a.m.
Eastern  Time  today  and a replay of the call will be  available  beginning  at
approximately noon Eastern Time and will run until April 11, 2004.

     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.


                                     -MORE-
<PAGE>

FRED Reports Fourth Quarter, Year-end Results
Page 3
March 11, 2004


                                   FRED'S INC.
                         Unaudited Financial Highlights
                    (in thousands, except per share amounts)
<TABLE>
<S>                                                                    <C>              <C>               <C>

                                                                          13 Weeks         13 Weeks
                                                                            Ended            Ended
                                                                         January 31,      February 1,      Percent
                                                                            2004             2003          Change
                                                                       -------------    -------------     ---------
Net sales                                                              $    378,023     $    325,324         16.2%
Operating income                                                       $     19,141     $     16,097         18.9%
Net income                                                             $     13,156     $     10,866         21.1%
Net income per share:*
     Basic                                                             $       0.34     $       0.28         21.4%
     Diluted                                                           $       0.33     $       0.28         17.9%
Average shares outstanding:*
     Basic                                                                   38,976           38,410          1.5%
     Diluted                                                                 39,823           39,110          1.8%

                                                                          52 Weeks         52 Weeks
                                                                            Ended            Ended
                                                                         January 31,      February 1,      Percent
                                                                            2004             2003          Change
                                                                       -------------    -------------     ---------
Net sales                                                              $  1,302,650     $  1,103,418         18.1%
Operating income                                                       $     51,691     $     42,677         21.1%
Net income                                                             $     34,426     $     28,216         22.0%
Net income per share:*
     Basic                                                             $       0.89     $       0.74         20.3%
     Diluted                                                           $       0.87     $       0.72         20.8%
Average shares outstanding:*
     Basic                                                                   38,754           38,255          1.3%
     Diluted                                                                 39,652           39,251          1.0%
</TABLE>


* All share and per share amounts have been adjusted to reflect the distribution
of a three-for-two stock split on July 1, 2003.



                                     -MORE-
<PAGE>

FRED Reports Fourth Quarter, Year-end Results
Page 4
March 11, 2004

                                   FRED'S INC.
                  Unaudited Fiscal 2003 Fourth Quarter Results
                    (in thousands, except per share amounts)
<TABLE>
<S>                                                      <C>                <C>         <C>               <C>
                                                            13 Weeks                       13 Weeks
                                                              Ended                          Ended
                                                           January 31,        % of        February 1,       % of
                                                              2004            Total          2003           Total
                                                         --------------     --------    -------------     ---------
Net sales                                                $      378,023       100.0%    $     325,324        100.0%
Cost of goods sold                                              273,787        72.4%          235,404         72.4%
                                                         --------------    ---------    -------------     ---------
Gross profit                                                    104,236        27.6%           89,920         27.6%
Selling, general and administrative expenses                     85,095        22.5%           73,823         22.7%
                                                         --------------    ---------    -------------     ---------
Operating income                                                 19,141         5.1%           16,097          4.9%
Interest expense, net                                               108         0.0%              149          0.0%
                                                         --------------    ---------    -------------     ---------
Income before income taxes                                       19,033         5.1%           15,948          4.9%
Provision for income taxes                                        5,877         1.6%            5,082          1.6%
                                                         --------------    ---------    -------------     ---------
Net income                                               $       13,156         3.5%    $      10,866          3.3%
                                                         ==============    =========    =============     =========
Net income per share:*
     Basic                                               $         0.34                 $        0.28
                                                         ==============                 =============
     Diluted                                             $         0.33                 $        0.28
                                                         ==============                 =============
Weighted average shares outstanding:*
     Basic                                                       38,976                        38,410
                                                         ==============                 =============
     Diluted                                                     39,823                        39,110
                                                         ==============                 =============


                          Unaudited Fiscal 2003 Results
                    (in thousands, except per share amounts)

                                                            52 Weeks                      52 Weeks
                                                              Ended                         Ended
                                                           January 31,        % of       February 1,        % of
                                                              2004            Total          2003           Total
                                                         --------------    ---------    -------------     ---------
Net sales                                                $    1,302,650       100.0%    $   1,103,418        100.0%
Cost of goods sold                                              934,331        71.7%          798,441         72.4%
                                                         --------------    ---------    -------------     ---------
Gross profit                                                    368,319        28.3%          304,977         27.6%
Selling, general and administrative expenses                    316,628        24.3%          262,300         23.7%
                                                         --------------    ---------    -------------     ---------
Operating income                                                 51,691         4.0%           42,677          3.9%
Interest expense, net                                               398         0.0%              203          0.0%
                                                         --------------    ---------    -------------     ---------
Income before income taxes                                       51,293         4.0%           42,474          3.9%
Provision for income taxes                                       16,867         1.3%           14,258          1.3%
                                                         --------------    ---------    -------------     ---------
Net income                                               $       34,426         2.7%    $      28,216          2.6%
                                                         ==============    =========    =============     =========
Net income per share:*
     Basic                                               $         0.89                 $        0.74
                                                         ==============                 =============
     Diluted                                             $         0.87                 $        0.72
                                                         ==============                 =============
Weighted average shares outstanding:*
     Basic                                                       38,754                        38,255
                                                         ==============                 =============
     Diluted                                                     39,652                        39,251
                                                         ==============                 =============
</TABLE>


* All share and per share amounts have been adjusted to reflect the distribution
of a three-for-two stock split on July 1, 2003.


                                     -MORE-


<PAGE>

FRED Reports Fourth Quarter, Year-end Results
Page 5
March 11, 2004


                                   FRED'S INC.
                             Unaudited Balance Sheet
                                 (in thousands)
<TABLE>
<S>                                                                                 <C>              <C>

                                                                                     January 31,       February 1,
                                                                                        2004              2003
                                                                                    -------------    --------------
ASSETS:
Cash and cash equivalents                                                           $       4,741    $        8,209
Inventories                                                                               239,962           193,506
Receivables and other current assets                                                       28,245            26,175
                                                                                    -------------    --------------
     Total current assets                                                                 272,948           227,890
Property and equipment, net                                                               137,231           113,219
Other noncurrent assets                                                                     4,005             4,739
                                                                                    -------------    --------------
     Total assets                                                                   $     414,184    $      345,848
                                                                                    =============    ==============


LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable                                                                    $      74,799    $       58,489
Current portion of indebtedness                                                                18               285
Current portion of capital lease obligation                                                   725               620
Accrued expenses                                                                           18,477            19,484
Current deferred tax liability                                                             11,486            10,559
Income taxes                                                                                1,251                 0
                                                                                    -------------    --------------
     Total current liabilities                                                            106,756            89,437

Indebtedness                                                                                5,603               458
Deferred tax liability                                                                      6,380               676
Capital lease obligations                                                                   1,686             2,052
Other noncurrent liabilities                                                                2,441             2,455
                                                                                    -------------    --------------
     Total liabilities                                                                    122,866            95,078
Shareholders' equity                                                                      291,318           250,770
                                                                                    -------------    --------------
     Total liabilities and shareholders' equity                                     $     414,184    $      345,848
                                                                                    =============    ==============
</TABLE>


                                     -END-
[{"type": "8-K", "sequence": "1", "filename": "freds8k031104.txt", "description": "CURRENT REPORT", "secsgml_size_bytes": 25123}]
{"company-data": {"conformed-name": "FREDS INC", "cik": "0000724571", "assigned-sic": "5331", "irs-number": "620634010", "state-of-incorporation": "TN", "fiscal-year-end": "0127"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-14565", "film-number": "04661910"}, "business-address": {"street1": "4300 NEW GETWELL RD", "city": "MEMPHIS", "state": "TN", "zip": "38118", "phone": "9013658880"}, "mail-address": {"street1": "4300 NEW GETWELL ROAD", "city": "MEMPHIS", "state": "TN", "zip": "38118"}, "former-company": {"former-conformed-name": "BADDOUR INC", "date-changed": "19910620"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                -----------------

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

        Date of report (Date of earliest event reported): March 11, 2004

                                  FRED'S, INC.
               (Exact Name of Registrant as Specified in Charter)

                         Commission File Number 00-19288

           Tennessee                                             62-0634010
  (State or other jurisdiction                               (I. R. S. Employer
of incorporation or organization)                            Identification No.)

  4300 New Getwell Road, Memphis, TN                                38118
(Address of principal executive offices)                          (Zip Code)

               Registrant's telephone number, including area code
                                 (901) 365-8880
Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

         (c)           Exhibits:

           Exhibit
            Number      Description
         -------------  -------------------------------------------------------

             99.1       Press release issued by Fred's, Inc., dated
                        March 11, 2004

Item 12.  Results of Operations and Financial Condition.

         On March 11, 2004,  Fred's Inc.  issued a press  release  announcing,
among other things,  its quarterly  earnings  results for its fourth quarter and
full fiscal year ended January 31, 2004. A copy of the press release is attached
as Exhibit 99.1 to this Current Report on Form 8-K.

                                       2
SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                            FRED'S, INC.
                                            (Registrant)

                                            By:  /s/ Jerry A. Shore
                                            ----------------------------
                                            Jerry A. Shore,
                                            Executive Vice President and
                                            Chief Financial Officer

March 11, 2004

                                       3
INDEX TO EXHIBITS

   Exhibit
    Number       Description
---------------  --------------------------------------------------------------

     99.1        Press release issued by Fred's, Inc., dated March 11, 2004

                                       4
Exhibit 99.1

FRED'S                          4300 New Getwell Road, Memphis, Tennessee 38118

                                          Contact: Jerry A. Shore
                                                   Executive Vice President and
                                                   Chief Financial Officer
                                                   (901) 362-3733, Ext. 2217

              FRED'S REPORTS 22% INCREASE IN FISCAL 2003 NET INCOME
                             ----------------------

       RECORD NEW STORE OPENINGS AND SOLID COMPARABLE STORES SALES GROWTH
                    CONTINUE TO PRODUCE STRONG SALES RESULTS

MEMPHIS,  Tenn. (March 11, 2004) - Fred's Inc. (Nasdaq/NM:  FRED) today reported
record  financial  results for the fourth fiscal  quarter and year ended January
31, 2004.

     Net income for the fourth quarter of 2003 increased 21% to $13.2 million or
$0.33 per diluted  share from $10.9  million or $0.28 per  diluted  share in the
year-earlier  period. For fiscal 2003, net income increased 22% to $34.4 million
or $0.87 per diluted  share from $28.2  million or $0.72 per  diluted  share for
fiscal 2002. All per share results have been adjusted for a three-for-two  stock
split distributed on July 1, 2003.

     Retail sales by Company stores for the fourth quarter of 2003 increased 17%
and total sales for the quarter rose 16% to $378.0 million versus $325.3 million
in the same period last year. On a comparable store basis,  sales increased 5.1%
for the quarter.  For fiscal 2003,  retail sales by Company stores increased 19%
and total sales for the period rose 18% to $1.303  billion  compared with $1.103
billion in fiscal 2002.  Comparable  store sales for fiscal 2003  increased 5.7%
over the prior year.

     Commenting on the results, Michael J. Hayes, Chief Executive Officer, said,
"Fiscal  2003 was a period of  significant  growth for  Fred's,  as the  company
achieved new milestones in several key areas.  Despite the challenges  presented
by a sluggish  economy and those  inherent in our efforts to oversee rapid store
growth  and the  ramp-up of our new  distribution  center,  Fred's  fundamentals
continued to improve, producing another year of record sales and earnings. Sales
growth  for the year  reflected  the  opening of 79 new stores as well as a 5.7%
increase  in  comparable  store  sales - in line with our target  range of 5%-7%
growth.  These  sales gains  combined  with an  enhanced  gross  margin to drive
operating margins again this year and generate a 22% increase in annual earnings
and 21% higher  fourth  quarter  earnings,  matching the outlook we expressed in
early January 2004.

     "Because of the record pace of new store  openings last year,  which pushed
us past the  500-store  mark,  we recently  raised our sights for  expansion  in
fiscal 2004 and now target  between  85-100  additional new stores in the coming
year,"  Hayes  added.  "Importantly,  we also have  strengthened  our ability to
support this more rapid growth due to steadily  increasing  productivity  at our
second distribution center, which opened almost a year ago, and with the ongoing
expansion of the number of stores it supplies.  The enhanced logistics solutions
this center offers, in tandem with our distribution  center in Memphis,  enabled
us to lower  distribution costs 70 basis points as a percent of sales last year,
despite an overall  rise in  transportation  costs,  and provide a solid  supply
platform to support chain growth."

                                     -MORE-
FRED Reports Fourth Quarter, Year-end Results
Page 2
March 11, 2004

     Concluding, Hayes said, "As we look ahead to fiscal 2004, we remain excited
about the  opportunities we see for continued  growth and earnings  improvement.
Our strong pharmacy department, coupled with a compelling  convenience/value/mix
offering  to  the   customer,   continues  to  provide  us  with  a  competitive
differentiation that sets Fred's apart in the marketplace.  With these strengths
in mind,  we remain  enthusiastic  about our goals of  achieving  15%-17%  sales
growth in fiscal 2004,  based on our new store  expansion  plans and an expected
overall increase of 4%-7% in comparable  store sales.  Considering this outlook,
we believe the Company is  positioned  to increase  earnings per share in fiscal
2004 to a range of $1.03 to $1.10."

     Fred's  gross  profit  for the fourth  quarter  of 2003 was $104.2  million
compared with $89.9 million in the prior-year  period,  representing an increase
of 16% for the period.  Gross margin for the quarter was 27.6%,  unchanged  from
27.6% last year.  Gross profit for fiscal 2003  increased 21% to $368.3  million
from $305.0  million  for fiscal  2002.  Gross  margin for fiscal 2003 was 28.3%
versus 27.6% last year, reflecting higher initial markup from product purchases,
increased vendor allowances and better control of shrinkage.

     Selling, general and administrative expenses for the fourth quarter of 2003
improved to 22.5% of sales from 22.7% of sales in the  year-earlier  period.  In
the quarter,  favorable productivity  improvements in distribution expenses were
offset  somewhat by  increases  in store and pharmacy  operating  expenses.  For
fiscal 2003, selling,  general and administrative expenses increased to 24.3% of
sales  compared  with 23.7% of sales in 2002.  The  increase  in  expenses  as a
percent  of sales for the  year-to-date  period  resulted  primarily  from costs
associated  with the Company's  expansion of store and  distribution  facilities
during the first three quarters of 2003.

     Operating  income for the fourth  quarter  of 2003  increased  19% to $19.1
million from $16.1 million in the year-earlier period. Operating income was 5.1%
of sales in the fourth  quarter of 2003,  up from 4.9% in the fourth  quarter of
2002. Operating income for fiscal 2003 increased 21% to $51.7 million from $42.7
million in the prior year.  Operating  income for fiscal 2003 was 4.0% of sales,
up from 3.9% of sales last year.

     Fred's Inc. operates 522 discount general merchandise stores,  including 26
franchised  Fred's stores mainly in the  southeastern  United  States.  For more
information  about  the  Company,  visit  Fred's  website  on  the  Internet  at
www.fredsinc.com.  A public, listen-only simulcast and replay of Fred's year-end
conference   call   may  be   accessed   at  the   Company's   web  site  or  at
www.fulldisclosure.com.  The simulcast  will begin at  approximately  10:00 a.m.
Eastern  Time  today  and a replay of the call will be  available  beginning  at
approximately noon Eastern Time and will run until April 11, 2004.

     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.

                                     -MORE-
FRED Reports Fourth Quarter, Year-end Results
Page 3
March 11, 2004

                                   FRED'S INC.
                         Unaudited Financial Highlights
                    (in thousands, except per share amounts)
13 Weeks         13 Weeks
                                                                            Ended            Ended
                                                                         January 31,      February 1,      Percent
                                                                            2004             2003          Change
                                                                       -------------    -------------     ---------
Net sales                                                              $    378,023     $    325,324         16.2%
Operating income                                                       $     19,141     $     16,097         18.9%
Net income                                                             $     13,156     $     10,866         21.1%
Net income per share:*
     Basic                                                             $       0.34     $       0.28         21.4%
     Diluted                                                           $       0.33     $       0.28         17.9%
Average shares outstanding:*
     Basic                                                                   38,976           38,410          1.5%
     Diluted                                                                 39,823           39,110          1.8%

                                                                          52 Weeks         52 Weeks
                                                                            Ended            Ended
                                                                         January 31,      February 1,      Percent
                                                                            2004             2003          Change
                                                                       -------------    -------------     ---------
Net sales                                                              $  1,302,650     $  1,103,418         18.1%
Operating income                                                       $     51,691     $     42,677         21.1%
Net income                                                             $     34,426     $     28,216         22.0%
Net income per share:*
     Basic                                                             $       0.89     $       0.74         20.3%
     Diluted                                                           $       0.87     $       0.72         20.8%
Average shares outstanding:*
     Basic                                                                   38,754           38,255          1.3%
     Diluted                                                                 39,652           39,251          1.0%
* All share and per share amounts have been adjusted to reflect the distribution
of a three-for-two stock split on July 1, 2003.

                                     -MORE-
FRED Reports Fourth Quarter, Year-end Results
Page 4
March 11, 2004

                                   FRED'S INC.
                  Unaudited Fiscal 2003 Fourth Quarter Results
                    (in thousands, except per share amounts)
13 Weeks                       13 Weeks
                                                              Ended                          Ended
                                                           January 31,        % of        February 1,       % of
                                                              2004            Total          2003           Total
                                                         --------------     --------    -------------     ---------
Net sales                                                $      378,023       100.0%    $     325,324        100.0%
Cost of goods sold                                              273,787        72.4%          235,404         72.4%
                                                         --------------    ---------    -------------     ---------
Gross profit                                                    104,236        27.6%           89,920         27.6%
Selling, general and administrative expenses                     85,095        22.5%           73,823         22.7%
                                                         --------------    ---------    -------------     ---------
Operating income                                                 19,141         5.1%           16,097          4.9%
Interest expense, net                                               108         0.0%              149          0.0%
                                                         --------------    ---------    -------------     ---------
Income before income taxes                                       19,033         5.1%           15,948          4.9%
Provision for income taxes                                        5,877         1.6%            5,082          1.6%
                                                         --------------    ---------    -------------     ---------
Net income                                               $       13,156         3.5%    $      10,866          3.3%
                                                         ==============    =========    =============     =========
Net income per share:*
     Basic                                               $         0.34                 $        0.28
                                                         ==============                 =============
     Diluted                                             $         0.33                 $        0.28
                                                         ==============                 =============
Weighted average shares outstanding:*
     Basic                                                       38,976                        38,410
                                                         ==============                 =============
     Diluted                                                     39,823                        39,110
                                                         ==============                 =============

                          Unaudited Fiscal 2003 Results
                    (in thousands, except per share amounts)

                                                            52 Weeks                      52 Weeks
                                                              Ended                         Ended
                                                           January 31,        % of       February 1,        % of
                                                              2004            Total          2003           Total
                                                         --------------    ---------    -------------     ---------
Net sales                                                $    1,302,650       100.0%    $   1,103,418        100.0%
Cost of goods sold                                              934,331        71.7%          798,441         72.4%
                                                         --------------    ---------    -------------     ---------
Gross profit                                                    368,319        28.3%          304,977         27.6%
Selling, general and administrative expenses                    316,628        24.3%          262,300         23.7%
                                                         --------------    ---------    -------------     ---------
Operating income                                                 51,691         4.0%           42,677          3.9%
Interest expense, net                                               398         0.0%              203          0.0%
                                                         --------------    ---------    -------------     ---------
Income before income taxes                                       51,293         4.0%           42,474          3.9%
Provision for income taxes                                       16,867         1.3%           14,258          1.3%
                                                         --------------    ---------    -------------     ---------
Net income                                               $       34,426         2.7%    $      28,216          2.6%
                                                         ==============    =========    =============     =========
Net income per share:*
     Basic                                               $         0.89                 $        0.74
                                                         ==============                 =============
     Diluted                                             $         0.87                 $        0.72
                                                         ==============                 =============
Weighted average shares outstanding:*
     Basic                                                       38,754                        38,255
                                                         ==============                 =============
     Diluted                                                     39,652                        39,251
                                                         ==============                 =============
* All share and per share amounts have been adjusted to reflect the distribution
of a three-for-two stock split on July 1, 2003.

                                     -MORE-
FRED Reports Fourth Quarter, Year-end Results
Page 5
March 11, 2004

                                   FRED'S INC.
                             Unaudited Balance Sheet
                                 (in thousands)
January 31,       February 1,
                                                                                        2004              2003
                                                                                    -------------    --------------
ASSETS:
Cash and cash equivalents                                                           $       4,741    $        8,209
Inventories                                                                               239,962           193,506
Receivables and other current assets                                                       28,245            26,175
                                                                                    -------------    --------------
     Total current assets                                                                 272,948           227,890
Property and equipment, net                                                               137,231           113,219
Other noncurrent assets                                                                     4,005             4,739
                                                                                    -------------    --------------
     Total assets                                                                   $     414,184    $      345,848
                                                                                    =============    ==============

LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable                                                                    $      74,799    $       58,489
Current portion of indebtedness                                                                18               285
Current portion of capital lease obligation                                                   725               620
Accrued expenses                                                                           18,477            19,484
Current deferred tax liability                                                             11,486            10,559
Income taxes                                                                                1,251                 0
                                                                                    -------------    --------------
     Total current liabilities                                                            106,756            89,437

Indebtedness                                                                                5,603               458
Deferred tax liability                                                                      6,380               676
Capital lease obligations                                                                   1,686             2,052
Other noncurrent liabilities                                                                2,441             2,455
                                                                                    -------------    --------------
     Total liabilities                                                                    122,866            95,078
Shareholders' equity                                                                      291,318           250,770
                                                                                    -------------    --------------
     Total liabilities and shareholders' equity                                     $     414,184    $      345,848
                                                                                    =============    ==============
-END-