GDYS Goodys Family Clothing (MM)

KNOXVILLE, Tenn., Aug. 4 /PRNewswire-FirstCall/ -- Goody's Family Clothing, Inc. (NASDAQ:GDYS) today reported total sales for fiscal periods ended July 30, 2005, compared with fiscal periods ended July 31, 2004, as follows (dollars in millions): 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. The Company plans to release financial results for the second quarter of fiscal 2005 on Wednesday, August 17, 2005, and will conduct a conference call that day at 9:00 a.m. (Eastern Time). To listen to the Company's conference call, dial (913) 981-5509. A replay will be available from 12:00 p.m. (Eastern Time) on, August 17, 2005, until 6:00 p.m. on August 18, 2005. To listen to the playback, dial (719) 457-0820 and enter 4907604 when prompted for the access code. This press release contains certain forward-looking statements which are based upon current expectations, business plans and estimates and involve material risks and uncertainties including, but not limited to: (i) variances in estimates for reserve accounts and selling, general and administrative expenses; (ii) weather conditions; (iii) global political unrest, including terrorism and war; (iv) the general economic conditions within the Company's markets; (v) trends affecting the Company's financial condition, results of operations or cash flows; (vi) the ability to predict fashion trends; (vii) the effectiveness of advertising and promotional events; (viii) the ability to achieve business plan targets; (ix) the timely availability of branded and private-label merchandise in sufficient quantities to satisfy customer demand; and, (x) the absence of any unanticipated expenses. Readers are cautioned that any such forward-looking statement is not a guarantee of future performance and involves risks and uncertainties, and that actual results may differ materially from those projected in the forward- looking statements. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the Company's financial results may be found in the Company's 2004 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Certain of such filings may be accessed through the Company's web site, http://www.goodysonline.com/, then choose "SEC Filings." Goody's, headquartered in Knoxville, Tennessee, is a retailer of moderately priced family apparel. With the opening of the 3 new stores today, the Company currently operates 371 stores (368 at July 30, 2005, compared with 345 July 31, 2004) in the 20 states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia. DATASOURCE: Goody's Family Clothing, Inc. CONTACT: Edward R. Carlin, Chief Financial Officer of Goody's Family Clothing, Inc., +1-865-966-2000 Web site: http://www.goodysonline.com/

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