Goodys Family Clothing (GDYS) 8-K Goody’s Family Clothing Reports Second Quarter Results

Exhibit 99.1

Contact:	Edward R. Carlin
	Chief Financial Officer
	(865) 966-2000

GOODY’S FAMILY CLOTHING REPORTS SECOND QUARTER RESULTS

Knoxville, Tennessee. (August 17, 2005) — Goody’s Family Clothing, Inc. (Nasdaq:GDYS) today reported a net loss of $5,425,000, or ($0.16) per share, for the 13 weeks ended July 30, 2005, compared with net earnings of $1,278,000, or $0.04 per diluted share, for the 13 weeks ended July 31, 2004. Total sales for the second quarter of fiscal 2005 declined 1.0% to $291,668,000 compared with $294,632,000 during the same period last year. Comparable store sales for the second quarter of fiscal 2005 were down 6.6% from the same period last year.

For the 26 weeks ended July 30, 2005, the Company reported a net loss of $7,203,000, or ($0.22) per share, compared with net earnings of $9,349,000, or $0.28 per diluted share, for the 26 weeks ended July 31, 2004. Total sales for the first six months of fiscal 2005 declined 2.2% to $584,373,000 compared with $597,510,000 during the same period last year. Comparable store sales for the first six months of fiscal 2005 decreased 7.3% from the same period last year.

“Sales were well below plan and the prior-year second quarter,” commented Robert M. Goodfriend, Chairman and Chief Executive Officer. “As previously reported, we missed some spring and summer fashion trends in all of our women’s areas, which affected customer traffic and sales storewide. The weak performance forced us to be more promotional than planned in July 2005 in an effort to stimulate sales and reduce seasonal inventories. Also, inventory levels in certain other areas were planned too low, which had a further negative impact on our business. Finally, a shift in advertising dollars from television to radio in the first half of this year has not been successful. As a result, we were not able to achieve our gross profit plan and could not leverage our selling, general and administrative expense rate. We have taken corrective action in each of these areas and remain optimistic that fiscal 2005 will be profitable.”

Goodfriend also indicated that inventory levels on a per-square-foot basis were lower at the end of the second quarter this year compared with the same period last year.

For the fiscal year to date, the Company has opened 18 new stores and relocated or remodeled five stores. For the balance of the fiscal year, the Company expects to open approximately 11 additional new stores and relocate or remodel up to five existing stores.

The Company will conduct a conference call today at 9:00 a.m. (Eastern Time). To listen to the Company’s conference call, dial (913) 981-5509. A replay will be available from 12:00 p.m. (Eastern Time) on, August 17, 2005, until 6:00 p.m. on August 18, 2005. To listen to the playback, dial (719) 457-0820 and enter 4907604 when prompted for the access code.

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GDYS Reports Second Quarter Results
Page 2
August 17, 2005

Exhibit 99.1

This press release contains certain forward-looking statements which are based upon current expectations, business plans and estimates and involve material risks and uncertainties including, but not limited to:

(i)	the general economic conditions within the Company’s markets;
(ii)	weather conditions;
(iii)	trends affecting the Company’s financial condition, results of operations or cash flows;
(iv)	the ability to predict fashion trends;
(v)	the timely availability of branded and private-label merchandise in sufficient quantities to satisfy customer demand;
(vi)	the effectiveness of advertising and promotional events;
(vii)	the ability to achieve business plan targets;
(viii)	the ability to negotiate acceptable lease terms for new store locations and existing store locations to be remodeled or relocated;
(ix)	individual store performance, including new stores;
(x)	competition, including the impact of competitors’ store expansion;
(xi)	unanticipated needs for additional capital expenditures; and,
(xii)	global political unrest, including terrorism and war.

Readers are cautioned that any such forward-looking statement is not a guarantee of future performance and involves risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the Company’s financial results may be found in the Company’s 2004 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Certain of such filings may be accessed through the Company’s web site,www.goodysonline.com, then choose “SEC Filings.”

Goody’s, headquartered in Knoxville, Tennessee, is a retailer of moderately priced family apparel. The Company currently operates 371 stores (368 at July 30, 2005, compared with 345 July 31, 2004) in the 20 states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia.

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GDYS Reports Second Quarter Results
Page 3
August 17, 2005

Exhibit 99.1

GOODY’S FAMILY CLOTHING, INC.
Unaudited Consolidated Statements of Operations
(In thousands, except per share amounts)

	13 Weeks Ended						26 Weeks Ended
	July 30,				July 31,		July 30,			July 31,
	2005				2004		2005			2004
Sales	$	291,668			$	294,632	$	584,373		$	597,510
Cost of sales and occupancy expenses		209,833				206,174		419,575			415,649
Gross profit		81,835				88,458		164,798			181,861
Selling, general and administrative expenses		91,467				86,497		177,837			167,221
(Loss) earnings from operations		(9,632	)			1,961		(13,039	)		14,640
Investment income		438				206		841			391
Interest expense		1				130		11			131
(Loss) earnings before income taxes		(9,195	)			2,037		(12,209	)		14,900
(Benefit) provision for income taxes		(3,770	)			759		(5,006	)		5,551
Net (loss) earnings	$	(5,425	)		$	1,278	$	(7,203	)	$	9,349
Earnings (loss) per common share:
Basic	$	(0.16	)	��	$	0.04	$	(0.22	)	$	0.28
Diluted	$	(0.16	)		$	0.04	$	(0.22	)	$	0.28
Cash dividends declared per common share:	$	0.03			$	0.03	$	0.06		$	0.05
Weighted average common shares outstanding:
Basic		33,039				32,961		32,978			32,926
Diluted		33,039				33,893		32,978			33,897

Unaudited Condensed Consolidated Balance Sheets
(In thousands)

	July 30,		July 31,
Assets	2005		2004
Cash and cash equivalents	$	88,997	$	108,354
Inventories		237,885		240,729
Accounts receivable and other current assets		24,244		14,364
Total current assets		351,126		363,447
Property and equipment, net		135,917		120,706
Other assets		4,781		5,278
Total assets	$	491,824	$	489,431
Liabilities and Shareholders’ Equity
Accounts payable — trade	$	134,646	$	140,911
Accounts payable — other		12,398		12,297
Accrued expenses		49,397		46,290
Current deferred income taxes		26,560		23,176
Total current liabilities		223,001		222,674
Long-term liabilities		30,626		18,386
Deferred income taxes		6,703		12,584
Shareholders’ equity		231,494		235,787
Total liabilities and shareholders’ equity	$	491,824	$	489,431

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