Table of Contents

PART I.

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

FINANCIAL INFORMATION
Item 1.          Financial Statements
Item 2.          Management's Discussion and Analysis of Financial Condition and
Item 3.          Quantitative and Qualitative Disclosures About Market Risk
Item 4.          Controls and Procedures

PART II.

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

OTHER INFORMATION
Item 6.          Exhibits and Reports on Form 8-K

SIGNATURES
EXHIBIT INDEX

EX-31.1

EX-31.2

EX-32







                                    FORM 10-Q


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


[ X ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934.

                   For the quarterly period ended May 1, 2004.

                                       OR

[   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934.

For the transition period from                 to                .
                               ---------------    ---------------

                        Commission file number 001-14565


                                  FRED'S, INC.
             (Exact name of registrant as specified in its charter)


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

4300 New Getwell Rd., Memphis, Tennessee                38118
(Address of principal executive offices)              (zip code)

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes      X     .  No            .
    -----------      -----------

Indicate by check mark whether the registrant is an accelerated filer.
Yes      X        No
    -----------      -----------

The  registrant  had  39,207,444  shares of Class A voting,  no par value common
stock outstanding as of June 4, 2004.




                                  FRED'S, INC.
                                  ------------

                                      INDEX
                                      -----

                                                                        Page No.
- --------------------------------------------------------------------------------

Part I - Financial Information
- ------------------------------

  Item 1 - Financial Statements (unaudited):

    Consolidated Balance Sheets as of
     May 1, 2004 and January 31, 2004                                       3

    Consolidated Statements of Income
     for the Thirteen Weeks Ended May 1, 2004
     and May 3, 2003                                                        4

    Consolidated Statements of Cash Flows
     for the Thirteen Weeks Ended May 1, 2004
     and May 3, 2003                                                        5

    Notes to Consolidated Financial Statements                            6 - 8

  Item 2 - Management's Discussion and
             Analysis of Financial Condition and
             Results of Operations                                        9 - 11

  Item 3 - Quantitative and Qualitative Disclosure
             about Market Risk                                             11

  Item 4 - Controls and Procedures                                         11

Part II - Other Information                                                12
- ---------------------------
       Item 6 - Exhibits and Reports on Form 8-K

Signatures                                                                 13
- ----------





                                  FRED'S, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

                   (in thousands, except for number of shares)

                                                                                              
                                                                                  May 1,            January 31,
                                                                                   2004                2004
                                                                                   ----                ----
ASSETS:
- -------
Current assets:
      Cash and cash equivalents                                                   $4,573              $8,209
      Receivables, less allowance for doubtful
      accounts of $703 ($1,437 at January 31, 2004)                               21,086              23,931
      Inventories                                                                263,689             239,748
      Other current assets                                                         5,284               4,094
                                                                                --------            --------
           Total current assets                                                  294,632             272,514
      Property and equipment, at depreciated cost                                137,614             135,433
      Equipment under capital leases, less accumulated
       amortization of $3,312 ($3,169 at January 31,2004)                          1,655               1,798
      Other noncurrent assets                                                      4,078               4,005
                                                                                --------              ------
           Total assets                                                         $437,979            $413,750
                                                                                ========            ========

LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
      Accounts payable                                                           $75,962             $74,799
      Current portion of indebtedness                                                 18                  18
      Current portion of capital lease obligations                                   689                 725
      Accrued liabilities                                                         16,595              19,113
      Current deferred tax liability                                              11,855              11,487
       Income taxes payable                                                        2,836                 930
                                                                                 -------             -------
           Total current liabilities                                             107,955             107,072
                                                                                 =======             =======

Long term portion of indebtedness                                                 21,660               5,603
Deferred tax liability                                                             6,539               6,335
Capital lease obligations                                                          1,543               1,686
Other noncurrent liabilities                                                       2,507               2,441
                                                                                 -------               -----
           Total liabilities                                                     140,204             123,137
                                                                                 -------             -------

Shareholders' equity:
- ---------------------
      Preferred stock, nonvoting, no par value,
        10,000,000 shares authorized, none outstanding                             ---                 ---
      Preferred stock, Series A junior participating
         nonvoting, no par value, 224,594 shares
         authorized, none outstanding                                              ---                 ---
      Common stock, Class A voting, no par value,
         60,000,000 shares authorized 39,167,627
         shares issued and outstanding
         (39,105,639 shares at January 31, 2004)                                 126,950             126,430
      Common stock, Class B nonvoting, no par value,
         11,500,000 shares authorized, none outstanding                            ---                 ---
      Retained earnings                                                          170,825             164,183
                                                                                 -------             -------
           Total shareholders' equity                                            297,775             290,613
                                                                                 -------             -------
      Total liabilities and shareholders' equity                                $437,979            $413,750
                                                                                ========            ========


          See accompanying notes to consolidated financial statements.




                                  FRED'S, INC.
                        CONSOLIDATED STATEMENTS OF INCOME

                                   (unaudited)

                    (in thousands, except per share amounts)

                                                                                  
                                                                Thirteen Weeks Ended
                                                                --------------------

                                                       May 1,                            May 3,
                                                        2004                              2003
                                                     --------                           --------

Net Sales                                            $341,486                           $310,689

Cost of goods sold                                    244,692                            222,741
                                                      -------                            -------

     Gross Profit                                      96,794                             87,948

Selling, general and administrative
  Expenses                                             85,311                             75,971
                                                       ------                             ------

     Operating income                                  11,483                             11,977

Interest expense                                           62                                 97
                                                         ----                               ----

     Income before income taxes                        11,421                             11,880

Provision for income taxes                              3,997                              4,023
                                                        -----                              -----

Net income                                             $7,424                             $7,857
                                                       ======                             ======

Net income per share:

     Basic                                              $ .19                              $ .20
                                                        =====                              =====

     Diluted                                            $ .19                              $ .20
                                                        =====                              =====

Weighed average shares outstanding:

     Basic                                             39,060                             38,456

     Effect of diluted stock options                      646                                982
                                                          ---                                ---

     Diluted                                           39,706                             39,438
                                                       ======                             ======

Dividends paid per common share                          $.02                               $.02
                                                         ====                               ====



          See accompanying notes to consolidated financial statements.




                                  FRED'S, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (unaudited)
                                 (in thousands)

                                                                                           
                                                                                  Thirteen Weeks Ended
                                                                                  --------------------
                                                                                 May 1,            May 3,
                                                                                  2004              2003
                                                                                  ----              ----

Cash flows from operating activities:
    Net income                                                                   $7,424           $7,857
    Adjustments to reconcile net income
    to net cash flows from operating activities:
      Depreciation and amortization                                               6,529            5,698
      Lifo reserve                                                                  367              370
      Deferred income taxes                                                         572              594
      Amortization of deferred compensation on
        restricted stock incentive plan                                              --               15
      Tax benefit upon exercise of stock options                                    121              384
    Issuance of restricted shares                                                    --                8
      (Increase)decrease in assets:
         Receivables                                                              2,845              698
         Inventories                                                            (24,308)         (19,344)
         Other assets                                                            (1,190)             (79)
    Increase (decrease) in liabilities:
      Accounts payable and accrued liabilities                                   (1,355)           8,153
      Income taxes payable                                                        1,906            8,215
      Other noncurrent liabilities                                                   66              100
                                                                                --------          -------
      Net cash (used in) provided by operating activities                        (7,023)          12,669
                                                                                --------          -------

Cash flows from investing activities:
    Capital expenditures                                                         (8,165)         (12,692)
    Asset acquisition, net of cash acquired
     (primarily intangibles)                                                       (475)            (457)
                                                                                   -----            -----
Net cash used in investing activities                                            (8,640)         (13,149)
                                                                                 -------         --------

Cash flows from financing activities:
    Reduction of indebtedness and capital lease obligations                        (183)            (360)
    Proceeds from revolving line of credit, net of payments                      16,061              ---
    Proceeds from exercise of options                                               399              678
     Cash dividends paid                                                           (782)            (770)
                                                                                   -----            -----
    Net cash provided by (used in) financing activities                          15,495             (452)
                                                                                 -------           ------
     Decrease in cash and cash equivalents                                         (168)            (932)
     Beginning of period cash and cash equivalents                                4,741            8,209
                                                                                 -------           ------
     End of period cash and cash equivalents                                     $4,573           $7,277
                                                                                ========          =======
Supplemental disclosures of cash flow information:
    Interest paid                                                                  $ 62              $92
                                                                                   =====             ====
    Income taxes paid                                                            $1,400             $---
                                                                                 =======            =====


          See accompanying notes to consolidated financial statements.




                                  FRED'S, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

- --------------------------------------------------------------------------------
NOTE 1:  BASIS OF PRESENTATION
- --------------------------------------------------------------------------------
     Fred's,   Inc.  ("We",   "Our"  or  "Us")  operates  534  discount  general
merchandise stores, including 26 franchised Fred's stores, in fourteen states in
the southeastern  United States.  Two hundred and forty-three of the stores have
full service pharmacies.

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance  with the  instructions to Form 10-Q and therefore do not
include all information and notes necessary for a fair presentation of financial
position,  results of  operations  and cash flows in conformity  with  generally
accepted  accounting  principles.  The  statements  do reflect  all  adjustments
(consisting  of only  normal  recurring  accruals)  which are, in the opinion of
management,   necessary  for  a  fair  presentation  of  financial  position  in
conformity with generally accepted accounting principles.  The statements should
be read in conjunction with the Notes to the Consolidated  Financial  Statements
for the fiscal year ended January 31, 2004  incorporated  into Our Annual Report
on Form 10-K.

     The results of operations  for the  thirteen-week  period ended May 1, 2004
are not necessarily indicative of the results to be expected for the full fiscal
year.

     Certain prior quarter amounts have been reclassified to conform to the 2004
presentation.

- --------------------------------------------------------------------------------
NOTE 2:  INVENTORIES
- --------------------------------------------------------------------------------

     Warehouse  inventories  are stated at the lower of cost or market using the
FIFO (first-in, first-out) method. Retail inventories are stated at the lower of
cost or market as determined by the retail  inventory  method.  Under the retail
inventory method ("RIM"), the valuation of inventories at cost and the resulting
gross margin are calculated by applying a calculated cost-to-retail ratio to the
retail value of  inventories.  RIM is an  averaging  method that has been widely
used in the retail industry due to its practicality. Also, it is recognized that
the use of the RIM will result in valuing inventories at lower of cost or market
if  markdowns  are  currently  taken  as a  reduction  of the  retail  value  of
inventories.  Inherent in the RIM calculation are certain significant management
judgments and estimates including, among others, initial markups, markdowns, and
shrinkage,  which significantly impact the ending inventory valuation at cost as
well as resulting gross margin.  These significant  estimates,  coupled with the
fact that the RIM is an averaging  process,  can,  under certain  circumstances,
produce distorted or inaccurate cost figures.  Management  believes that our RIM
provides an inventory  valuation which reasonably  approximates cost and results
in carrying inventory at the lower of cost or market. For pharmacy  inventories,
which  are  $40.7  million  and $29.4  million  at May 1, 2004 and May 3,  2003,
respectively,  cost was determined using the LIFO (last-in,  first-out)  method.
The current cost of inventories exceeded the LIFO cost by $8.1 million at May 1,
2004 and $6.5 million at May 3, 2003.

LIFO pharmacy  inventory  costs can only be determined  annually when  inflation
rates and inventory  levels are finalized;  therefore,  LIFO pharmacy  inventory
costs for interim financial statements are estimated.




- --------------------------------------------------------------------------------
NOTE 3:  INCENTIVE STOCK OPTIONS
- --------------------------------------------------------------------------------

We account for our  stock-based  compensation  plans using the  intrinsic  value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and related Interpretations. No stock-based employee
compensation  expense is reflected in net income  because the exercise  price of
our incentive  employee  stock options equals the market price of the underlying
stock on the date of grant.  The following  table  illustrates the effect on net
income and  earnings  per share if we had  applied  the fair  value  recognition
provisions of Statement of Financial  Accounting  Standards No. 123, "Accounting
for  Stock-Based   Compensation"   (SFAS  No.  123),  to  stock-based   employee
compensation.


                                                                      

                                                           For the Quarter Ended
                                                     May 1, 2004            May 3, 2003
                                                     -----------            -----------
                                                    (In thousands, except per share data)

Net income                                           $     7,424            $     7,857
SFAS No. 123 pro forma compensation
expense, net of income taxes                                (164)                   (81)
                                                            -----                -------
SFAS No. 123 pro forma
net income                                           $     7,260            $     7,776
                                                     ============           ============
Pro forma earnings per share:
Basic                                                $      0.19            $      0.20
Diluted                                              $      0.18            $      0.20

Earnings per share, as reported:
Basic                                                $      0.19            $      0.20
Diluted                                              $      0.19            $      0.20







- --------------------------------------------------------------------------------
NOTE 4:  CHANGE IN ESTIMATE - INVENTORY SHRINKAGE
- --------------------------------------------------------------------------------

During the quarter we adopted a change in methodology for estimating  shrinkage,
as  recommended by our external  auditors to attain a more accurate  estimate of
the shrink  accrual.  This  change  increased  net income by  approximately  $.9
million and increased basic earnings per share by $.02 and diluted  earnings per
share by $.03.




Item 2:
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations
- --------------------------------------------------------------------------------
GENERAL
- --------------------------------------------------------------------------------

Our  business is subject to seasonal  influences,  but has tended to  experience
less seasonal  fluctuation  than many other retailers due to the mix of everyday
basic  merchandise  and pharmacy  business.  The fourth quarter is typically the
most profitable  quarter because it includes the Christmas  selling season.  The
overall strength of the fourth quarter is partially  mitigated,  however, by the
inclusion of the month of January, which is generally the least profitable month
of the year.

The impact of inflation on labor and occupancy  costs can  significantly  affect
our  operations.  Many of our  employees  are paid hourly  rates  related to the
federal  minimum wage and,  accordingly,  any increase  affects us. In addition,
payroll taxes,  employee benefits and other  employee-related  costs continue to
increase.  Occupancy costs,  including rent,  maintenance,  taxes and insurance,
also continue to rise. We believe that maintaining  adequate  operating  margins
through a combination of price adjustments and cost controls, careful evaluation
of occupancy  needs, and efficient  purchasing  practices are the most effective
tools for coping with increasing costs and expenses.

- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------

Thirteen Weeks Ended May 1, 2004 and May 3, 2003
- ------------------------------------------------
Net sales  increased to $341.5  million in 2004 from $310.7  million in 2003, an
increase of $30.8 million or 9.9%. The increase was  attributable  to comparable
store  sales  increases  of 2.7%  ($8.0  million)  and sales by  stores  not yet
included as comparable stores ($22.8 million). Sales to franchisees remained the
same as last  year.  The sales mix for the  period  was 49.1%  Hardlines,  33.7%
Pharmacy,  14.6%  Softlines,  and  2.6%  Franchise.  This  compares  with  49.2%
Hardlines,  33.3%  Pharmacy,  14.8%  Softlines,  and 2.7% Franchise for the same
period last year.

Gross profit for the first  quarter  remained at 28.3% of sales,  the same as in
the prior-year period.  Gross profit margins during the quarter were affected by
a change in methodology for estimating shrinkage, as recommended by our external
auditors to attain a more accurate  estimate of the shrink accrual.  This change
increased  gross margin during the quarter by  approximately  $1.4 million.  The
pharmacy  margin  decreased  in  the  quarter  due to  changes  in  third  party
reimbursement amounts.

Selling,  general and administrative expenses increased to $85.3 million in 2004
from $76.0  million in 2003.  As a percentage  of sales,  expenses  increased to
25.0% of sales  compared  to 24.5% of sales  last  year.  Selling,  general  and
administrative  expenses  increased  primarily due to the  de-leverage  of store
labor  cost as a  percent  of  sales.  In the  quarter,  distribution  cost as a
percentage of general  merchandise sales improved 40 basis over the same quarter
last year.

For the first  quarter of 2004 interest  expense was less than $.1 million,  the
same as in the first quarter of last year.

For the first quarter,  the effective  income tax rate was 35.0%, as compared to
33.9% in the first quarter of last year. The income tax rate is higher than last
year due to state tax credits  that were  earned last year that  resulted in the
rate  reduction.  We anticipate the tax rate for the remainder of the year to be
in the 35% range.




- --------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
- --------------------------------------------------------------------------------
Due to the seasonality of our business and the continued  increase in the number
of stores and  pharmacies,  inventories  are generally lower at year-end than at
each quarter-end of the following year.

Cash  flows  used by  operating  activities  totaled  $7.0  million  during  the
thirteen-week  period  ended May 1, 2004.  Cash was  primarily  used to increase
inventories by  approximately  $24.3 million in the first quarter of 2004.  This
increase was primarily  attributable to 21 new stores and 14 remodeled stores in
the first quarter of 2004.

Cash flows used in investing  activities  totaled $8.6  million,  and  consisted
primarily  of  capital  expenditures  associated  with the  store  and  pharmacy
expansion  program  ($6.3  million)  and  for  technology  and  other  corporate
expenditures  ($1.8  million).  During the first  quarter,  we opened 21 stores,
closed 1 store, opened 7 pharmacies,  closed 1 pharmacy and remodeled 14 stores.
We expect to open 20 to 25 stores in the second quarter and  approximately 80 to
100 stores for the year. In 2004, the Company is planning  capital  expenditures
totaling   approximately  $41.6  million.   Expenditures  are  planned  totaling
approximately  $31.1  million  for  upgrades,   remodels,   or  new  stores  and
pharmacies; $6.9 million for technology upgrades,  distribution center equipment
and capital maintenance;  and $3.6 million for the acquisition of customer lists
and other  pharmacy  related  items.  Depreciation  expense for the year will be
approximately $28 million.

Cash flows provided by financing  activities  totaled $15.5 million and included
$16.1 million of borrowings under the Company's revolver for inventory needs.

On July 31, 2003,  we entered into the third loan  modification  agreement  (the
"Agreement") to modify the April 3, 2000 Revolving Loan and Credit Agreement, as
amended.  The Agreement  provides us with an unsecured  revolving line of credit
commitment of up to $40 million and bears interest at a 1.5% below prime rate or
a LIBOR-based  rate. Under the most restrictive  covenants of the Agreement,  we
are required to maintain specified  shareholders' equity (which was $251,389,000
at May 1, 2004) and net income  levels.  We are required to pay a commitment fee
to the bank at a rate per annum equal to .15% on the  unutilized  portion of the
revolving  line  commitment  over  the  term of the  Agreement.  The term of the
Agreement  extends to July 31,  2006.  There were  $21.6  million in  borrowings
outstanding at May 1, 2004.

We  believe  that  sufficient  capital  resources  are  available  in  both  the
short-term  and long-term  through  currently  available cash and cash generated
from future  operations  and,  if  necessary,  the ability to obtain  additional
financing.

- --------------------------------------------------------------------------------
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
- --------------------------------------------------------------------------------

Other than statements based on historical  facts,  many of the matters discussed
in this Form 10-Q relate to events  which we expect or  anticipate  may occur in
the future.  Such statements are defined as  "forward-looking  statements" under
the Private  Securities  Litigation  Reform Act of 1995 (the "Reform  Act"),  15
U.S.C.A.  Sections 77z-2 and 78u-5 (Supp.  1996).  The Reform Act created a safe
harbor to protect  companies from  securities  law liability in connection  with
forward-looking  statements.  Fred's Inc. ("Fred's" or the "Company") intends to
qualify  both its written and oral  forward-looking  statements  for  protection
under the Reform Act and any other similar safe harbor provisions.

The words "believe",  "anticipate",  "project",  "plan",  "expect",  "estimate",
"objective",  "forecast",  "goal",  "intend",  "will  likely  result",  or "will
continue" and similar expressions generally identify forward-looking statements.



All  forward-looking  statements are inherently  uncertain,  and concern matters
that involve risks and other factors which may cause the actual  performance  of
the Company to differ  materially from the  performance  expressed or implied by
these statements.  Therefore,  forward-looking statements should be evaluated in
the context of these uncertainties and risks, including but not limited to:

    -     Economic and weather  conditions  which affect buying  patterns of our
          customers and supply chain efficiency;

    -     Changes in  consumer  spending  and our ability to  anticipate  buying
          patterns and implement appropriate inventory strategies;

    -     Continued availability of capital and financing;

    -     Competitive factors;

    -     Changes in reimbursement practices for pharmaceuticals;

    -     Governmental regulation;

    -     Increases in fuel and utility rates;

    -      Other factors affecting business beyond our control.

Consequently,  all  forward-looking  statements are qualified by this cautionary
statement. We undertake no obligation to update any forward-looking statement to
reflect events or circumstances arising after the date on which it was made.

Item 3.
- --------------------------------------------------------------------------------
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
- --------------------------------------------------------------------------------

We have no holdings of derivative  financial or commodity  instruments as of May
1, 2004. We are exposed to financial market risks, including changes in interest
rates. All borrowings under our Revolving Credit Agreement bear interest at 1.5%
below prime rate or a  LIBOR-based  rate.  An increase in interest  rates of 100
basis points would not significantly  affect our income.  All of our business is
transacted in U.S. dollars and, accordingly,  foreign exchange rate fluctuations
have never had a  significant  impact on us, and they are not expected to in the
foreseeable future.

Item 4.
- --------------------------------------------------------------------------------
CONTROLS AND PROCEDURES
- --------------------------------------------------------------------------------

Within 90 days prior to the date of this  report,  the  Company  carried  out an
evaluation,  under  the  supervision  and with the  participation  of our  Chief
Executive  Officer and Chief  Financial  Officer,  of the  effectiveness  of the
Company's disclosure controls and procedures (as defined in Rules 13a-14((c) and
15d-1(c) under the Securities  Exchange Act of 1934).  Based on that evaluation,
the Chief Executive Officer and the Chief Financial Officer,  concluded that, as
of  the  date  of  their  evaluation,  the  Company's  disclosure  controls  and
procedures  are  effective  in  timely  alerting  them to  material  information
required to be included in the Company's  periodic SEC reports.  There have been
no significant changes (including  corrective actions with regard to significant
deficiencies and material  weaknesses) in the Company's  internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of their most recent evaluation.




                           PART II. OTHER INFORMATION

Item 1.       Legal Proceedings

                  Not Applicable.

Item 2.       Changes in Securities

                  Not Applicable.

Item 3.       Defaults Upon Senior Securities

                  Not Applicable.

Item 4.       Submission of Matters to a Vote of Securities Holders

                  Not Applicable.

Item 5.       Other Information

                  Not Applicable.

Item 6.       Exhibits and Reports on Form 8-K

                  Exhibits:
                    31.1   Certification of Chief Executive Officer.
                    31.2   Certification of Chief Financial Officer.
                    32.0   Certification of Chief Executive Officer and Chief
                           Financial Officer pursuant to 18 U.S.C. Section 1350.


                  Reports on Form 8-K:

                           1)  Form 8-K dated February 5, 2004 with press
                               release dated February 5, 2004, reporting its
                               sales for the four-week month of  January, the
                               fiscal fourth quarter, and the full fiscal year
                               ended January 31, 2004.

                           2)  Form 8-K dated March 11, 2004 with press release
                               dated March 11, 2004, reporting its quarterly
                               earnings results for its fourth quarter and full
                               fiscal year ended January 31, 2004.

                           3)  Form 8-K dated April 26, 2004 with press release
                               dated April 26, 2004, reporting that it is
                               revising its earnings outlook for 2004.





                                   SIGNATURES

     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.

Date:  June 10, 2004                      /s/ Michael J. Hayes
- --------------------                     ---------------------------------
                                         Michael J. Hayes
                                         Chief Executive Officer




Date:  June 10, 2004                      /s/ Jerry A. Shore
- --------------------                     ---------------------------------
                                         Jerry A. Shore
                                         Chief Financial Officer







                                   SIGNATURES

     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.

                                /s/ Michael J. Hayes
                                ------------------------
                                Michael J. Hayes
Date:  June 10, 2004            Chief Executive Officer
- --------------------




                                /s/ Jerry A. Shore
                                ------------------------
                                Jerry A. Shore
Date:  June 10, 2004            Chief Financial Officer
- -------------------





                                                                    Exhibit 31.1

                    Certification of Chief Executive Officer

I, Michael J. Hayes, certify that:

1.        I have reviewed this quarterly report on Form 10-Q of Fred's, Inc.;

2.        Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this report;

3.        Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

4.        The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange Act Rules  13a-15(e) and  15d-15(e))  and internal
          control  over  financial  reporting  (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f) for the registrant and have:

          a)   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls and  procedures to be  designated  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b)   Designated  such internal  control over financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;

          c)   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          d)   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting; and

5.        The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting,  to the  registrant's  auditors and the audit  committee of
          registrant's board of directors:

          a)   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b)   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.



Date: June 10, 2004                               /s/ Michael J. Hayes
                                                 -------------------------------
                                                 Michael J. Hayes
                                                 Chief Executive Officer



                                                                    Exhibit 31.2

                    Certification of Chief Financial Officer

I, Jerry A. Shore, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Fred's, Inc.

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in report, fairly present in all material respects the
     financial condition, results of operations and cash flows of the registrant
     as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f) for the registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and  procedures  to  be  designated  under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   Designated such internal control over financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   Disclosed  in this  report any  changes in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors:

     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.



Date: June 10, 2004                          /s/ Jerry A. Shore
                                            ------------------------------------
                                            Jerry A. Shore
                                            Executive Vice President and
                                            Chief Financial Officer



                                                                      Exhibit 32

      Certification of Chief Executive Officer AND CHIEF FINANCIAL OFFICER
                   Pursuant to Section 18 U.S.C. Section 1350

In connection  with this quarterly  report on Form 10-Q of Fred's,  Inc. each of
the  undersigned,  Michael J. Hayes and Jerry A. Shore,  certifies,  pursuant to
Section 18 U.S.C. Section 1350, that:
     1.   The report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and
     2.   The  information  contained  in this report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of Fred's, Inc.



Date: June 10, 2004                           /s/ Michael J. Hayes
                                             -----------------------------------
                                             Michael J. Hayes
                                             Chief Executive Officer

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