Goody’s May Same-Store Sales Fall 9.1%

Goody's Family Clothing, Inc. reported total sales of $95.9 million for the four weeks ended May 28, 2005, a decrease of 3.5% from total sales of $99.4 million for the fiscal month of May 2004. Comparable store sales for May 2005 decreased 9.1% from May 2004.

Total sales for the first four months of fiscal 2005 decreased 3.4% to $388.6 million from $402.3 million during the same period last year. Comparable store sales for the first four months of fiscal 2005 decreased 8.4% from the same period last year.

“Our business continued to suffer in May 2005, even though we continued to be more promotional than last year and plan,” commented Robert M. Goodfriend, Chairman and Chief Executive Officer. “We missed some fashion trends in all of our women's areas, which affected sales throughout the store. Also, we planned our inventory levels too low in certain other areas of the Company which further affected our business. We expect these issues will be resolved by the back-to-school selling season, which begins in mid-July. Furthermore, a shift in advertising dollars from our television broadcast schedule to radio in the first half of this year has not been successful. Corrective action has been taken and we expect to see positive results beginning in July. Finally, inventory levels on a per-square-foot basis at the end of May 2005 were lower than at the end of May 2004, as planned.”

Goody's expects that comparable store sales will increase in the low- single digits for the period beginning in July through the end of the fiscal year, when compared to the same period in the prior year. However, given the negative comparable store sales results for the first four fiscal months, the Company now believes comparable store sales for fiscal 2005, as a whole, will decrease in the low-single digits. Unless there is significant improvement in sales and margins for the remainder of the quarter, the Company expects second quarter results to be lower than the $0.04 per diluted share reported for the second quarter last year. Actual results may vary from this revised guidance.