Goody's Family Clothing, Inc. reported total sales for the month of July slipped 1.1% to $89.0 million compared to $90.0 million last year. Comparable store sales for the month also decreased, down 5.5% for the month.

For the month, quarter, and year-to-date periods, sales for Goody's were as follows:


                          Total Sales               Percent Change

                                                             Comparable
                                                 Total          Store
     Fiscal Period:      2005      2004          Sales          Sales

     July               $ 89.0    $ 90.0         -1.1%          -5.1%
     Second Quarter     $291.7    $294.6         -1.0%          -6.6%
     Six Months         $584.4    $597.5         -2.2%          -7.3%

“As previously discussed, we missed some spring and summer fashion trends in all of our women's areas, which affected customer traffic and sales storewide,” commented Robert M. Goodfriend, chairman and chief executive officer. “This 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. We have taken corrective action in each of these areas.

“We anticipate our sales will improve as we receive fresh new fall merchandise and complete the liquidation of spring-summer products. However, with negative comparable store sales and lower margins for the month, we now expect to report a substantial net loss for the second quarter of 2005 compared with net earnings of $0.04 per diluted share reported in the year- earlier period. Actual results may vary from this revised guidance.”

Additionally, the company announced revisions to its previously released business plan for fiscal 2005. The company's revised business plan for fiscal 2005 now calls for the following components, versus previous guidance: (i) the gross profit rate, with lower merchandise margins and a higher occupancy expense rate, is now expected to be lower than the previous guidance of a gross profit rate of approximately 30.0%, although the company is not in a position to estimate a rate at this time; and (ii) the selling, general and administrative expense rate, with the lack of sales leverage, is now expected to be modestly higher than last year, before calculating and accruing performance bonuses, which were not accrued in 2004, versus a rate similar to last year. Actual results may vary from the revised business plan.

On July 28, 2005, the company opened a new store in Commerce, Georgia. Today, the company announced that it has opened three new stores – one each in Claypool Hill, Virginia; Terre Haute, Indiana; and Junction City, Kansas; and held the grand opening of a relocated store in Kingsport, Tennessee. On August 18, 2005, the company plans to open four new stores – one each in Elizabeth City, North Carolina; Texarkana, Texas; and Hutchinson and Pittsburg, Kansas; and hold the grand opening for a remodeled store in Tullahoma, Tennessee. The company expects to close a store in High Point, North Carolina, at the end of the month for which Goody's has no further financial obligations.