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 21, 2005


                                  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


Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the Registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17
    CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b)  under the
    Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))

<PAGE>

Item 2.02.  Results of Operations and Financial Condition

On March 22, 2005, Fred's,  Inc. issued a press release announcing its financial
results for the fourth  fiscal  quarter  and the fiscal  year ended  January 29,
2005.  A copy of the press  release is  furnished as Exhibit 99.1 to this report
and is incorporated herein by reference.

The  information  in this report,  including  the exhibit  attached  hereto,  is
furnished  pursuant  to Item 2.02 and shall not be deemed to be "filed"  for the
purposes of Section 18 of the  Securities  Exchange Act of 1934, as amended,  or
otherwise subject to the liabilities of that section.

Item 4.02.  Non-reliance on Previously Issued Financial Statements or a Related
            Audit Report or Completed Interim Review

On March  21,  2005,  the  Audit  Committee  of  Fred's,  Inc.  (the  "Company")
determined,  because the Company  has  changed  its  accounting  for its leases,
including  the  accounting  for  leasehold   improvements,   the   straight-line
accounting of lease payments,  and contingent lease related  payments,  that the
restatement of prior period  financial  statements is appropriate  for the first
three  quarters  of 2004 and for the fiscal  years  2003 and 2002,  and that the
Company's  previously  filed  financial  statements  for those periods should no
longer be relied  upon.  The  Company  has made  these  changes,  together  with
numerous  other  retailers,  following  the issuance on February 7, 2005, by the
Office of the Chief Accountant of the Securities and Exchange Commission ("SEC")
of a letter to the American Institute of Certified Public Accountants expressing
its  views  regarding  certain  operating  lease  accounting  issues  and  their
application under generally accepted accounting principles  ("GAAP").The effects
of the restatement have not yet been finalized and accordingly are not reflected
in the previously  filed  financial  results for 2004 and prior years, or in the
financial  results  reflected in the press  release  attached  hereto as Exhibit
99.1.  Management  currently  believes  that the impact on the earnings of 2004,
2003,  and 2002 will be  approximately  $0.01 to $0.02  reduction per share each
year.  Additionally,  the balance sheet will include adjustments to net property
and equipment, other current and noncurrent liabilities, and retained earnings.

The adjustments for the total  restatement will be included in the filing of the
Form 10-K for 2004 (its fiscal year ended January 29, 2005).  Accordingly,  such
previously  filed  financial  statements and the related  independent  auditors'
reports should no longer be relied upon.

The Audit  Committee of the Company and its  authorized  officers have discussed
the matters disclosed herein with the Company's current independent  auditors as
well as its auditors for the affected  periods,  and has provided  such auditors
with  copies  hereof.

Item  9.01.  Financial Statements, Pro Forma Financial Information and Exhibits.

       (c)           Exhibits:

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

           99.1       Press release issued by Fred's, Inc., dated March 22, 2005

                                       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


Date:    March 22, 2005











                                       3



<PAGE>

                                INDEX TO EXHIBITS


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

     99.1        Press release issued by Fred's, Inc., dated March 22, 2005
















                                       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 FISCAL 2004 RESULTS

                   COMPANY TO ADJUST ITS ACCOUNTING FOR LEASES

MEMPHIS,  Tenn. (March 22, 2005) - Fred's Inc. (NASDAQ/NM:  FRED) today reported
preliminary,  unaudited operating results for the fourth fiscal quarter and year
ended  January 29,  2005.  The Company  also noted,  like many  companies in the
retail  industry  and as  discussed  later in this  release,  it will adjust its
accounting  for leases in light of recent  correspondence  between the Office of
the Chief Accountant of the Securities and Exchange  Commission and the American
Institute of Certified Public  Accountants.  The effects of the restatement have
not yet been finalized and,  accordingly,  are not reflected in these  financial
results for 2004 and prior years.  Management currently believes that the impact
on the earnings of 2004,  2003,  and 2002 will be a reduction  of  approximately
$0.01 to $0.02 per diluted share in each year.  Additionally,  the balance sheet
will  include  adjustments  to net  property and  equipment,  other  current and
non-current liabilities, and retained earnings.

     All results presented in this press release are unaudited and such results,
including any forward-looking information, exclude the impact of any restatement
that will result from the Company's  review of its lease  accounting  practices.
The Company currently  believes that such adjustments will not change historical
or future cash flows, revenues, and comparable store sales.

     Net income for the fourth  quarter of 2004 declined 15% to $10.5 million or
$0.27 per diluted  share from $12.5  million or $0.31 per  diluted  share in the
year-earlier  period. For fiscal 2004, net income totaled $28.6 million or $0.72
per diluted share, or down 15% from $33.7 million or $0.85 per diluted share for
fiscal 2003.

     Retail sales by Company  stores for the fourth quarter of 2004 increased 9%
and total sales for the quarter  also rose 9% to $410.3  million  versus  $378.0
million in the same  period  last  year.  On a  comparable  store  basis,  sales
increased 0.3% for the quarter.  For fiscal 2004, retail sales by Company stores
increased  11% and total  sales for the period  also rose 11% to $1.442  billion
compared with $1.303 billion in fiscal 2003.  Comparable  store sales for fiscal
2004 increased 2.2% over the prior year.

     Commenting on the results, Michael J. Hayes, Chief Executive Officer, said,
"Throughout  much of fiscal 2004, we witnessed  slower overall sales and a shift
in sales mix to  lower-margin  products.  Missed  sales goals also  affected our
store-level  operating   efficiency,   as  staffing  plans  were  based  on  the
expectation  of better sales  performance.  Earnings for both the fourth quarter
and year reflect the impact of these adverse trends.

                                     -MORE-
<PAGE>

FRED Reports Fourth Quarter, Year-end Results
Page 2
March 22, 2005


     "Although fiscal 2004 was  challenging,  we were pleased to see indications
of  improving  conditions  as the year  came to an end,"  Hayes  continued.  "In
January,  both comparable  store sales growth and traffic  returned to plan, and
this upturn in our performance continued in February, providing optimistic start
to 2005.  Looking  ahead to the  coming  fiscal  year,  we believe we are better
positioned in many areas to build on this momentum."

     Fred's  gross  profit  for the fourth  quarter  of 2004 was $113.3  million
compared with $103.9 million in the prior-year period,  representing an increase
of 9% for the period. Gross margin for the quarter was 27.6% compared with 27.5%
last year,  reflecting  a better  initial  margin on pharmacy  sales and a lower
store  shrinkage  percentage,  which  offset  a  shift  in  product  mix  toward
lower-margin  basic and  consumable  products.  Gross  profit  for  fiscal  2004
increased  10% to $405.3  million  from $368.0  million for fiscal  2003.  Gross
margin for fiscal  2004 was 28.1%  versus  28.2% last year.  The year's  decline
primarily reflected a change in product mix.

     Selling, general and administrative expenses for the fourth quarter of 2004
increased  to 24.5% of sales  from  22.7% of sales in the  year-earlier  period,
primarily  as a result of labor  expense and  occupancy  costs  increases in the
stores and pharmacies,  higher corporate professional and insurance expenses, as
well as fuel price  increases  affecting  distribution  costs.  Expenses for the
fourth quarter of 2004 include a benefit of $1.3 million  related to a change in
the estimated life of store fixtures and  equipment.  For fiscal 2004,  selling,
general and  administrative  expenses  increased to 25.3% of sales from 24.3% of
sales in 2003.

     Operating  income for the  fourth  quarter  of 2004  declined  30% to $12.7
million from $18.1 million in the year-earlier period. Operating income was 3.1%
of sales in the fourth quarter of 2004,  down from 4.8% in the fourth quarter of
2003.  Operating income for fiscal 2004 declined 20% to $40.4 million from $50.6
million in the prior year.  Operating  income for fiscal 2004 was 2.8% of sales,
down from 3.9% of sales last year.

     The Company's  income tax rate was 28% for 2004 compared with 33% for 2003.
The lower tax rate for 2004 resulted  primarily from tax credits that originated
in 2003 and  2004  related  to the  Company's  distribution  center  in  Dublin,
Georgia.  These  credits were  recognized in 2004.  Additional  tax credits will
continue to benefit the Company in future years.

LEASE-RELATED ACCOUNTING ADJUSTMENTS

     On February 7, 2005,  the Office of the Chief  Accountant of the Securities
and Exchange  Commission issued a letter to the American  Institute of Certified
Public  Accountants  expressing  its views  regarding  certain  operating  lease
accounting  issues and their  application  under generally  accepted  accounting
principles.  In light of this letter,  and like many other companies  within the
retail  industry that are  correcting  common lease  accounting  practices,  the
Company will change the way it accounts for its leases, including the accounting
for leasehold improvements,  the straight-line accounting of lease payments, and
contingent  lease-related  payments,  and  thus  will  be  restating  previously
reported financial statements.

                                     -MORE-
<PAGE>

FRED Reports Fourth Quarter, Year-end Results
Page 3
March 22, 2005


     The  effects  of  the   restatement   have  not  yet  been  finalized  and,
accordingly,  are not  reflected in these  financial  results for 2004 and prior
years.  Management  currently  believes that the impact on the earnings of 2004,
2003, and 2002 will be a reduction of  approximately  $0.01 to $0.02 per diluted
share in each year. Additionally,  the balance sheet will include adjustments to
net property and  equipment,  other  current and  non-current  liabilities,  and
retained earnings.

GUIDANCE FOR 2005

     For the first quarter of fiscal year 2005, the Company  expects  comparable
store sales to increase  in the range of 2% to 4%, with the  full-year  increase
expected in the range of 4% to 6%. The expected  increase in total sales for the
first  quarter  will be in the range of 11% to 14%,  with a  full-year  increase
expected in the range of 11% to 15%, reflecting anticipated new store openings.

     Earnings per diluted share for the first quarter are expected to range from
$0.18 to $0.20; for the full year,  Fred's expects earnings per diluted share to
be in the range of $0.88 to $0.93.

     For  comparison  purposes,  the effect of adopting  Statement  of Financial
Accounting  Standards  No. 123  (Revised  2004),  "Share-Based  Payment"  is not
included in the earnings per diluted share estimates.  SFAS 123R will be adopted
during the second half of fiscal 2005.

     The Company expects to open 60 to 80 new stores and 20 to 25 new pharmacies
in 2005. Planned capital expenditures in 2005 will be approximately $35 million,
inclusive of $10 million for the expanded refrigeration program.

ABOUT FRED'S

     Fred's Inc. operates 595 discount general merchandise stores,  including 25
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 11:00 a.m. Eastern Time today and a replay
of the call will be available  beginning at approximately 1:00 p.m. Eastern Time
and will run until April 22, 2005.


                                     -MORE-
<PAGE>

FRED Reports Fourth Quarter, Year-end Results
Page 4
March 22, 2005

     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,  finalization  and completion
of the  2004  audit,  the  impact,  risks  and  adjustments  resulting  from the
finalization and completion of the lease accounting review and the audit of such
adjustments 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.

<TABLE>
<S>                                              <C>              <C>               <C>

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

                                                    13 Weeks*        13 Weeks*
                                                      Ended            Ended
                                                   January 29,      January 31,      Percent
                                                      2005             2004          Change
                                                 -------------    -------------     ---------
Net sales                                        $     410,306    $     378,023          8.5%
Operating income                                 $      12,714    $      18,071        -29.6%
Net income                                       $      10,530    $      12,451        -15.4%
Net income per share:
     Basic                                       $        0.27    $        0.32        -15.6%
     Diluted                                     $        0.27    $        0.31        -12.9%
Average shares outstanding:
     Basic                                              39,399           38,976
     Diluted                                            39,532           39,823

                                                    52 Weeks*        52 Weeks*
                                                      Ended            Ended
                                                   January 29,      January 31,      Percent
                                                      2005             2004          Change
                                                 -------------    -------------     ---------
Net sales                                        $   1,441,781    $   1,302,650         10.7%
Operating income                                 $      40,440    $      50,621        -20.1%
Net income                                       $      28,569    $      33,721        -15.3%
Net income per share:
     Basic                                       $        0.73    $        0.87        -16.1%
     Diluted                                     $        0.72    $        0.85        -15.3%
Average shares outstanding:
     Basic                                              39,252           38,754
     Diluted                                            39,532           39,652
</TABLE>

* 2004 Actual is unaudited and  unadjusted  for lease  accounting  matters which
have not been finalized.

                                     -MORE-
<PAGE>

FRED Reports Fourth Quarter, Year-end Results
Page 5
March 22, 2005


                                   FRED'S INC.
                  Unaudited Fiscal 2004 Fourth Quarter Results
                    (in thousands, except per share amounts)
<TABLE>
<S>                                                      <C>                  <C>       <C>                 <C>

                                                            13 Weeks*                      13 Weeks*
                                                              Ended                          Ended
                                                           January 29,        % of        January 31,       % of
                                                              2005            Total          2004           Total
                                                         --------------      -------    -------------       -------
Net sales                                                $      410,306       100.0%    $     378,023        100.0%
Cost of goods sold                                              297,012        72.4%          274,121         72.5%
                                                         --------------      -------    -------------       -------
Gross profit                                                    113,294        27.6%          103,902         27.5%
Selling, general and administrative expenses                    100,580        24.5%           85,831         22.7%
                                                         --------------      -------    -------------       -------
Operating income                                                 12,714         3.1%           18,071          4.8%
Interest expense, net                                               251         0.1%              108          0.0%
                                                         --------------      -------    -------------       -------
Income before income taxes                                       12,463         3.0%           17,963          4.8%
Provision for income taxes                                        1,933         0.4%            5,512          1.5%
                                                         --------------      -------    -------------       -------
Net income                                               $       10,530         2.6%    $      12,451          3.3%
                                                         ==============      =======    =============       =======
Net income per share:
     Basic                                               $         0.27                 $        0.32
                                                         ==============                 =============
     Diluted                                             $         0.27                 $        0.31
                                                         ==============                 =============
Weighted average shares outstanding:
     Basic                                                       39,399                        38,976
                                                         ==============                 =============
     Diluted                                                     39,532                        39,823
                                                         ==============                 =============
</TABLE>


                          Unaudited Fiscal 2004 Results
                    (in thousands, except per share amounts)
<TABLE>
<S>                                                      <C>                  <C>       <C>                 <C>

                                                            52 Weeks*                     52 Weeks*
                                                              Ended                         Ended
                                                           January 29,        % of       January 31,        % of
                                                              2005            Total          2004           Total
                                                         --------------       ------    -------------       -------
Net sales                                                $    1,441,781       100.0%    $   1,302,650        100.0%
Cost of goods sold                                            1,036,474        71.9%          934,665         71.8%
                                                         --------------       ------    -------------       -------
Gross profit                                                    405,307        28.1%          367,985         28.2%
Selling, general and administrative expenses                    364,867        25.3%          317,364         24.3%
                                                         --------------       ------    -------------       -------
Operating income                                                 40,440         2.8%           50,621          3.9%
Interest expense, net                                               793         0.1%              398          0.0%
                                                         --------------       ------    -------------       -------
Income before income taxes                                       39,647         2.7%           50,223          3.9%
Provision for income taxes                                       11,078         0.7%           16,502          1.3%
                                                         --------------       ------    -------------       -------
Net income                                               $       28,569         2.0%    $      33,721          2.6%
                                                         ==============       ======    =============       =======
Net income per share:
     Basic                                               $         0.73                 $        0.87
                                                         ==============                 =============
     Diluted                                             $         0.72                 $        0.85
                                                         ==============                 =============
Weighted average shares outstanding:
     Basic                                                       39,252                        38,754
                                                         ==============                 =============
     Diluted                                                     39,532                        39,652
                                                         ==============                 =============
</TABLE>

* 2004 Actual is unaudited and  unadjusted  for lease  accounting  matters which
have not been finalized.

                                     -MORE-
<PAGE>

FRED Reports Fourth Quarter, Year-end Results
Page 6
March 22, 2005

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

                                                        January 29,       January 31,
                                                           2005*             2004*
                                                       -------------    --------------
ASSETS:
Cash and cash equivalents                              $       5,365    $        4,741
Inventories                                                  275,365           239,962
Receivables and other current assets                          38,400            28,245
                                                       -------------    --------------
     Total current assets                                    319,130           272,948
Property and equipment, net                                  147,244           137,231
Other noncurrent assets                                        5,710             4,005
                                                       -------------    --------------
     Total assets                                      $     472,084    $      414,184
                                                       =============    ==============


LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable                                       $      70,504    $       74,799
Current portion of indebtedness                                   18                18
Current portion of capital lease obligation                      666               725
Accrued expenses                                              26,546            18,477
Current deferred tax liability                                18,262            11,486
Income taxes                                                       0             1,251
                                                       -------------    --------------
     Total current liabilities                               115,996           106,756

Indebtedness                                                  23,181             5,603
Deferred tax liability                                        10,064             6,380
Capital lease obligations                                      1,031             1,686
Other noncurrent liabilities                                   2,386             2,441
                                                       -------------    --------------
     Total liabilities                                       152,658           122,866
Shareholders' equity                                         319,426           291,318
                                                       -------------    --------------
     Total liabilities and shareholders' equity        $     472,084    $      414,184
                                                       =============    ==============
</TABLE>

* 2004 Actual is unaudited and  unadjusted  for lease  accounting  matters which
have not been finalized.
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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 21, 2005

                                  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

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the Registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17
    CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b)  under the
    Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))
Item 2.02.  Results of Operations and Financial Condition

On March 22, 2005, Fred's,  Inc. issued a press release announcing its financial
results for the fourth  fiscal  quarter  and the fiscal  year ended  January 29,
2005.  A copy of the press  release is  furnished as Exhibit 99.1 to this report
and is incorporated herein by reference.

The  information  in this report,  including  the exhibit  attached  hereto,  is
furnished  pursuant  to Item 2.02 and shall not be deemed to be "filed"  for the
purposes of Section 18 of the  Securities  Exchange Act of 1934, as amended,  or
otherwise subject to the liabilities of that section.

Item 4.02.  Non-reliance on Previously Issued Financial Statements or a Related
            Audit Report or Completed Interim Review

On March  21,  2005,  the  Audit  Committee  of  Fred's,  Inc.  (the  "Company")
determined,  because the Company  has  changed  its  accounting  for its leases,
including  the  accounting  for  leasehold   improvements,   the   straight-line
accounting of lease payments,  and contingent lease related  payments,  that the
restatement of prior period  financial  statements is appropriate  for the first
three  quarters  of 2004 and for the fiscal  years  2003 and 2002,  and that the
Company's  previously  filed  financial  statements  for those periods should no
longer be relied  upon.  The  Company  has made  these  changes,  together  with
numerous  other  retailers,  following  the issuance on February 7, 2005, by the
Office of the Chief Accountant of the Securities and Exchange Commission ("SEC")
of a letter to the American Institute of Certified Public Accountants expressing
its  views  regarding  certain  operating  lease  accounting  issues  and  their
application under generally accepted accounting principles  ("GAAP").The effects
of the restatement have not yet been finalized and accordingly are not reflected
in the previously  filed  financial  results for 2004 and prior years, or in the
financial  results  reflected in the press  release  attached  hereto as Exhibit
99.1.  Management  currently  believes  that the impact on the earnings of 2004,
2003,  and 2002 will be  approximately  $0.01 to $0.02  reduction per share each
year.  Additionally,  the balance sheet will include adjustments to net property
and equipment, other current and noncurrent liabilities, and retained earnings.

The adjustments for the total  restatement will be included in the filing of the
Form 10-K for 2004 (its fiscal year ended January 29, 2005).  Accordingly,  such
previously  filed  financial  statements and the related  independent  auditors'
reports should no longer be relied upon.

The Audit  Committee of the Company and its  authorized  officers have discussed
the matters disclosed herein with the Company's current independent  auditors as
well as its auditors for the affected  periods,  and has provided  such auditors
with  copies  hereof.

Item  9.01.  Financial Statements, Pro Forma Financial Information and Exhibits.

       (c)           Exhibits:

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

           99.1       Press release issued by Fred's, Inc., dated March 22, 2005

                                       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

Date:    March 22, 2005

                                       3
INDEX TO EXHIBITS

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

     99.1        Press release issued by Fred's, Inc., dated March 22, 2005

                                       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 FISCAL 2004 RESULTS

                   COMPANY TO ADJUST ITS ACCOUNTING FOR LEASES

MEMPHIS,  Tenn. (March 22, 2005) - Fred's Inc. (NASDAQ/NM:  FRED) today reported
preliminary,  unaudited operating results for the fourth fiscal quarter and year
ended  January 29,  2005.  The Company  also noted,  like many  companies in the
retail  industry  and as  discussed  later in this  release,  it will adjust its
accounting  for leases in light of recent  correspondence  between the Office of
the Chief Accountant of the Securities and Exchange  Commission and the American
Institute of Certified Public  Accountants.  The effects of the restatement have
not yet been finalized and,  accordingly,  are not reflected in these  financial
results for 2004 and prior years.  Management currently believes that the impact
on the earnings of 2004,  2003,  and 2002 will be a reduction  of  approximately
$0.01 to $0.02 per diluted share in each year.  Additionally,  the balance sheet
will  include  adjustments  to net  property and  equipment,  other  current and
non-current liabilities, and retained earnings.

     All results presented in this press release are unaudited and such results,
including any forward-looking information, exclude the impact of any restatement
that will result from the Company's  review of its lease  accounting  practices.
The Company currently  believes that such adjustments will not change historical
or future cash flows, revenues, and comparable store sales.

     Net income for the fourth  quarter of 2004 declined 15% to $10.5 million or
$0.27 per diluted  share from $12.5  million or $0.31 per  diluted  share in the
year-earlier  period. For fiscal 2004, net income totaled $28.6 million or $0.72
per diluted share, or down 15% from $33.7 million or $0.85 per diluted share for
fiscal 2003.

     Retail sales by Company  stores for the fourth quarter of 2004 increased 9%
and total sales for the quarter  also rose 9% to $410.3  million  versus  $378.0
million in the same  period  last  year.  On a  comparable  store  basis,  sales
increased 0.3% for the quarter.  For fiscal 2004, retail sales by Company stores
increased  11% and total  sales for the period  also rose 11% to $1.442  billion
compared with $1.303 billion in fiscal 2003.  Comparable  store sales for fiscal
2004 increased 2.2% over the prior year.

     Commenting on the results, Michael J. Hayes, Chief Executive Officer, said,
"Throughout  much of fiscal 2004, we witnessed  slower overall sales and a shift
in sales mix to  lower-margin  products.  Missed  sales goals also  affected our
store-level  operating   efficiency,   as  staffing  plans  were  based  on  the
expectation  of better sales  performance.  Earnings for both the fourth quarter
and year reflect the impact of these adverse trends.

                                     -MORE-
FRED Reports Fourth Quarter, Year-end Results
Page 2
March 22, 2005

     "Although fiscal 2004 was  challenging,  we were pleased to see indications
of  improving  conditions  as the year  came to an end,"  Hayes  continued.  "In
January,  both comparable  store sales growth and traffic  returned to plan, and
this upturn in our performance continued in February, providing optimistic start
to 2005.  Looking  ahead to the  coming  fiscal  year,  we believe we are better
positioned in many areas to build on this momentum."

     Fred's  gross  profit  for the fourth  quarter  of 2004 was $113.3  million
compared with $103.9 million in the prior-year period,  representing an increase
of 9% for the period. Gross margin for the quarter was 27.6% compared with 27.5%
last year,  reflecting  a better  initial  margin on pharmacy  sales and a lower
store  shrinkage  percentage,  which  offset  a  shift  in  product  mix  toward
lower-margin  basic and  consumable  products.  Gross  profit  for  fiscal  2004
increased  10% to $405.3  million  from $368.0  million for fiscal  2003.  Gross
margin for fiscal  2004 was 28.1%  versus  28.2% last year.  The year's  decline
primarily reflected a change in product mix.

     Selling, general and administrative expenses for the fourth quarter of 2004
increased  to 24.5% of sales  from  22.7% of sales in the  year-earlier  period,
primarily  as a result of labor  expense and  occupancy  costs  increases in the
stores and pharmacies,  higher corporate professional and insurance expenses, as
well as fuel price  increases  affecting  distribution  costs.  Expenses for the
fourth quarter of 2004 include a benefit of $1.3 million  related to a change in
the estimated life of store fixtures and  equipment.  For fiscal 2004,  selling,
general and  administrative  expenses  increased to 25.3% of sales from 24.3% of
sales in 2003.

     Operating  income for the  fourth  quarter  of 2004  declined  30% to $12.7
million from $18.1 million in the year-earlier period. Operating income was 3.1%
of sales in the fourth quarter of 2004,  down from 4.8% in the fourth quarter of
2003.  Operating income for fiscal 2004 declined 20% to $40.4 million from $50.6
million in the prior year.  Operating  income for fiscal 2004 was 2.8% of sales,
down from 3.9% of sales last year.

     The Company's  income tax rate was 28% for 2004 compared with 33% for 2003.
The lower tax rate for 2004 resulted  primarily from tax credits that originated
in 2003 and  2004  related  to the  Company's  distribution  center  in  Dublin,
Georgia.  These  credits were  recognized in 2004.  Additional  tax credits will
continue to benefit the Company in future years.

LEASE-RELATED ACCOUNTING ADJUSTMENTS

     On February 7, 2005,  the Office of the Chief  Accountant of the Securities
and Exchange  Commission issued a letter to the American  Institute of Certified
Public  Accountants  expressing  its views  regarding  certain  operating  lease
accounting  issues and their  application  under generally  accepted  accounting
principles.  In light of this letter,  and like many other companies  within the
retail  industry that are  correcting  common lease  accounting  practices,  the
Company will change the way it accounts for its leases, including the accounting
for leasehold improvements,  the straight-line accounting of lease payments, and
contingent  lease-related  payments,  and  thus  will  be  restating  previously
reported financial statements.

                                     -MORE-
FRED Reports Fourth Quarter, Year-end Results
Page 3
March 22, 2005

     The  effects  of  the   restatement   have  not  yet  been  finalized  and,
accordingly,  are not  reflected in these  financial  results for 2004 and prior
years.  Management  currently  believes that the impact on the earnings of 2004,
2003, and 2002 will be a reduction of  approximately  $0.01 to $0.02 per diluted
share in each year. Additionally,  the balance sheet will include adjustments to
net property and  equipment,  other  current and  non-current  liabilities,  and
retained earnings.

GUIDANCE FOR 2005

     For the first quarter of fiscal year 2005, the Company  expects  comparable
store sales to increase  in the range of 2% to 4%, with the  full-year  increase
expected in the range of 4% to 6%. The expected  increase in total sales for the
first  quarter  will be in the range of 11% to 14%,  with a  full-year  increase
expected in the range of 11% to 15%, reflecting anticipated new store openings.

     Earnings per diluted share for the first quarter are expected to range from
$0.18 to $0.20; for the full year,  Fred's expects earnings per diluted share to
be in the range of $0.88 to $0.93.

     For  comparison  purposes,  the effect of adopting  Statement  of Financial
Accounting  Standards  No. 123  (Revised  2004),  "Share-Based  Payment"  is not
included in the earnings per diluted share estimates.  SFAS 123R will be adopted
during the second half of fiscal 2005.

     The Company expects to open 60 to 80 new stores and 20 to 25 new pharmacies
in 2005. Planned capital expenditures in 2005 will be approximately $35 million,
inclusive of $10 million for the expanded refrigeration program.

ABOUT FRED'S

     Fred's Inc. operates 595 discount general merchandise stores,  including 25
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 11:00 a.m. Eastern Time today and a replay
of the call will be available  beginning at approximately 1:00 p.m. Eastern Time
and will run until April 22, 2005.

                                     -MORE-
FRED Reports Fourth Quarter, Year-end Results
Page 4
March 22, 2005

     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,  finalization  and completion
of the  2004  audit,  the  impact,  risks  and  adjustments  resulting  from the
finalization and completion of the lease accounting review and the audit of such
adjustments 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.
FRED'S INC.
                         Unaudited Financial Highlights
                    (in thousands, except per share amounts)

                                                    13 Weeks*        13 Weeks*
                                                      Ended            Ended
                                                   January 29,      January 31,      Percent
                                                      2005             2004          Change
                                                 -------------    -------------     ---------
Net sales                                        $     410,306    $     378,023          8.5%
Operating income                                 $      12,714    $      18,071        -29.6%
Net income                                       $      10,530    $      12,451        -15.4%
Net income per share:
     Basic                                       $        0.27    $        0.32        -15.6%
     Diluted                                     $        0.27    $        0.31        -12.9%
Average shares outstanding:
     Basic                                              39,399           38,976
     Diluted                                            39,532           39,823

                                                    52 Weeks*        52 Weeks*
                                                      Ended            Ended
                                                   January 29,      January 31,      Percent
                                                      2005             2004          Change
                                                 -------------    -------------     ---------
Net sales                                        $   1,441,781    $   1,302,650         10.7%
Operating income                                 $      40,440    $      50,621        -20.1%
Net income                                       $      28,569    $      33,721        -15.3%
Net income per share:
     Basic                                       $        0.73    $        0.87        -16.1%
     Diluted                                     $        0.72    $        0.85        -15.3%
Average shares outstanding:
     Basic                                              39,252           38,754
     Diluted                                            39,532           39,652
* 2004 Actual is unaudited and  unadjusted  for lease  accounting  matters which
have not been finalized.

                                     -MORE-
FRED Reports Fourth Quarter, Year-end Results
Page 5
March 22, 2005

                                   FRED'S INC.
                  Unaudited Fiscal 2004 Fourth Quarter Results
                    (in thousands, except per share amounts)
13 Weeks*                      13 Weeks*
                                                              Ended                          Ended
                                                           January 29,        % of        January 31,       % of
                                                              2005            Total          2004           Total
                                                         --------------      -------    -------------       -------
Net sales                                                $      410,306       100.0%    $     378,023        100.0%
Cost of goods sold                                              297,012        72.4%          274,121         72.5%
                                                         --------------      -------    -------------       -------
Gross profit                                                    113,294        27.6%          103,902         27.5%
Selling, general and administrative expenses                    100,580        24.5%           85,831         22.7%
                                                         --------------      -------    -------------       -------
Operating income                                                 12,714         3.1%           18,071          4.8%
Interest expense, net                                               251         0.1%              108          0.0%
                                                         --------------      -------    -------------       -------
Income before income taxes                                       12,463         3.0%           17,963          4.8%
Provision for income taxes                                        1,933         0.4%            5,512          1.5%
                                                         --------------      -------    -------------       -------
Net income                                               $       10,530         2.6%    $      12,451          3.3%
                                                         ==============      =======    =============       =======
Net income per share:
     Basic                                               $         0.27                 $        0.32
                                                         ==============                 =============
     Diluted                                             $         0.27                 $        0.31
                                                         ==============                 =============
Weighted average shares outstanding:
     Basic                                                       39,399                        38,976
                                                         ==============                 =============
     Diluted                                                     39,532                        39,823
                                                         ==============                 =============
Unaudited Fiscal 2004 Results
                    (in thousands, except per share amounts)
52 Weeks*                     52 Weeks*
                                                              Ended                         Ended
                                                           January 29,        % of       January 31,        % of
                                                              2005            Total          2004           Total
                                                         --------------       ------    -------------       -------
Net sales                                                $    1,441,781       100.0%    $   1,302,650        100.0%
Cost of goods sold                                            1,036,474        71.9%          934,665         71.8%
                                                         --------------       ------    -------------       -------
Gross profit                                                    405,307        28.1%          367,985         28.2%
Selling, general and administrative expenses                    364,867        25.3%          317,364         24.3%
                                                         --------------       ------    -------------       -------
Operating income                                                 40,440         2.8%           50,621          3.9%
Interest expense, net                                               793         0.1%              398          0.0%
                                                         --------------       ------    -------------       -------
Income before income taxes                                       39,647         2.7%           50,223          3.9%
Provision for income taxes                                       11,078         0.7%           16,502          1.3%
                                                         --------------       ------    -------------       -------
Net income                                               $       28,569         2.0%    $      33,721          2.6%
                                                         ==============       ======    =============       =======
Net income per share:
     Basic                                               $         0.73                 $        0.87
                                                         ==============                 =============
     Diluted                                             $         0.72                 $        0.85
                                                         ==============                 =============
Weighted average shares outstanding:
     Basic                                                       39,252                        38,754
                                                         ==============                 =============
     Diluted                                                     39,532                        39,652
                                                         ==============                 =============
* 2004 Actual is unaudited and  unadjusted  for lease  accounting  matters which
have not been finalized.

                                     -MORE-
FRED Reports Fourth Quarter, Year-end Results
Page 6
March 22, 2005

                                   FRED'S INC.
                             Unaudited Balance Sheet
                                 (in thousands)
January 29,       January 31,
                                                           2005*             2004*
                                                       -------------    --------------
ASSETS:
Cash and cash equivalents                              $       5,365    $        4,741
Inventories                                                  275,365           239,962
Receivables and other current assets                          38,400            28,245
                                                       -------------    --------------
     Total current assets                                    319,130           272,948
Property and equipment, net                                  147,244           137,231
Other noncurrent assets                                        5,710             4,005
                                                       -------------    --------------
     Total assets                                      $     472,084    $      414,184
                                                       =============    ==============

LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable                                       $      70,504    $       74,799
Current portion of indebtedness                                   18                18
Current portion of capital lease obligation                      666               725
Accrued expenses                                              26,546            18,477
Current deferred tax liability                                18,262            11,486
Income taxes                                                       0             1,251
                                                       -------------    --------------
     Total current liabilities                               115,996           106,756

Indebtedness                                                  23,181             5,603
Deferred tax liability                                        10,064             6,380
Capital lease obligations                                      1,031             1,686
Other noncurrent liabilities                                   2,386             2,441
                                                       -------------    --------------
     Total liabilities                                       152,658           122,866
Shareholders' equity                                         319,426           291,318
                                                       -------------    --------------
     Total liabilities and shareholders' equity        $     472,084    $      414,184
                                                       =============    ==============
* 2004 Actual is unaudited and  unadjusted  for lease  accounting  matters which
have not been finalized.