WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE. ^WPCE^<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROMTHE CONDENSED CONSOLIDATED BALANCE SHEET AS OF OCTOBER 28, 1995 AND THECONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED OCTOBER28, 1995 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCHFINANCIAL STATEMENTS. </LEGEND> <CIK> 0000724571 <NAME> FREDS INC. <MULTIPLIER> 1,000 <PERIOD-TYPE> 9-MOS <FISCAL-YEAR-END> FEB-03-1996 <PERIOD-END> OCT-28-1995 <CASH> 1,417 <SECURITIES> 0 <RECEIVABLES> 7,243 <ALLOWANCES> (596) <INVENTORY> 101,259 <CURRENT-ASSETS> 112,239 <PP&E> 106,127 <DEPRECIATION> (54,255) <TOTAL-ASSETS> 170,900 <CURRENT-LIABILITIES> 52,427 <BONDS> 2,242 <COMMON> 63,458 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <OTHER-SE> 51,692 <TOTAL-LIABILITY-AND-EQUITY> 170,900 <SALES> 285,943 <TOTAL-REVENUES> 285,943 <CGS> 212,552 <TOTAL-COSTS> 212,552 <OTHER-EXPENSES> 69,954 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 353 <INCOME-PRETAX> 3,084 <INCOME-TAX> 1,135 <INCOME-CONTINUING> 1,949 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 1,949 <EPS-PRIMARY> 0.21 <EPS-DILUTED> 0.21