Goody’s Family Clothing, Inc. reported net earnings of $1,863,000, or $0.06 per diluted share, for the 13 weeks ended May 3, 2003, compared with net earnings of $5,572,000, or $0.17 per diluted share, for the 13 weeks ended May 4, 2002. Net earnings for the 13 weeks ended May 3, 2003, include an $8.0 million pretax charge related to the Hilfiger matter discussed below. Total sales for the first quarter of fiscal 2003 decreased 0.2% to $283.0 million from $283.5 million during the same period last year. Comparable store sales for the first quarter of fiscal 2003 increased 0.9% over the same period in the prior year.

Robert M. Goodfriend, Chairman and Chief Executive Officer, commented, “Except for the charge related to the Hilfiger matter, I am pleased to report strong operating results for the first quarter of fiscal 2003 that seem to validate all of the hard work that Goody’s associates have invested in returning our Company to more acceptable levels of profitability. In fact, excluding the $8.0 million pretax charge ($0.15 per diluted share after taxes), the Company would have achieved one of its best first quarter earnings per share results since we went public in 1991. As for the Hilfiger matter, we are disappointed and surprised by the Court’s decision and, based on a preliminary review of the decision, we believe we have strong grounds for appeal and are currently reviewing our options. The Company ended the first quarter of fiscal 2003 with more than $91 million in cash and cash equivalents, no direct borrowings on our line of credit, and no long-term debt.”

Goodfriend continued, “As we celebrate our Company’s 50th year of operations, we are wholly focused on providing both our shoppers AND our shareholders with the greatest possible value for their investment in our Company.”

The Company had previously reported the May 9, 2003 decision of an Atlanta Federal Court in the Hilfiger matter awarding damages to Tommy Hilfiger of approximately $11 million, plus reasonable attorneys fees and costs. Following such decision, the Company’s umbrella insurance carrier, Fireman’s Fund, commenced a declaratory action in Tennessee state court seeking a determination that Fireman’s Fund has no duty to indemnify Goody’s in the Hilfiger matter. The Company believes it has meritorious claims in the insurance action and intends to pursue such claims vigorously.

Fiscal year-to-date, the Company has opened three new stores, relocated or remodeled six stores and closed one store. As previously announced for fiscal 2003, the Company currently expects to open approximately 10 new stores, relocate or remodel approximately 14 of its existing stores and close approximately five stores.

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

                                                  Thirteen Weeks Ended
                                                    May 3,     May 4,
                                                     2003       2002

   Sales                                           $283,012   $283,504
    Cost of sales and occupancy expenses            197,196    199,046

    Gross profit                                     85,816     84,458
    Selling, general and administrative expenses     83,034     75,646

    Earnings from operations                          2,782      8,812
    Investment income                                   177        104
    Interest expense                                      1          1

    Earnings before income taxes                      2,958      8,915
    Provision for income taxes                        1,095      3,343

    Net earnings                                   $  1,863   $  5,572