Fred's July Sales Rise 6%
MEMPHIS, Tenn.--Fred's Inc. (NASDAQ: FRED) today reported record sales for the fiscal month, quarter and six-month period ended August 4, 2007.
Fred's total sales for July increased 6% to $126.5 million from $119.2 million in same month last year. Comparable store sales for the month rose 0.5% on top of a 4.5% increase in July 2006.
Total sales for the second quarter increased 4% to $424.6 million from $406.9 million in the year-earlier period. Comparable store sales for the quarter increased 0.8% versus the same period last year, when Fred's registered a 3.1% increase in comparable store sales.
Fred's total sales for the first half of 2007 increased 5% to $866.9 million compared with $823.8 million in the same period last year. On a comparable store basis, year-to-date sales increased 1.3% versus the first six months of 2006, when Fred's posted a 2.5% gain in comparable store sales.
Commenting on the announcement, Michael J. Hayes, Chief Executive Officer, said, "Sales in July were below our expectations. Softlines, pharmacy and stationery were not as strong as we had planned, while pets and domestics were ahead of plan for the month.
"Helping to offset slower sales, we had lower-than-planned markdowns on back-to-school supplies," Hayes added, "and the shift to generic drugs, as we have said before, should have a largely neutral-to-positive effect on our bottom line because of the increased margin on generics. The roll-out of our merchandise refresher program is complete in almost 300 stores, and those stores continue to post 1%-2% better comparable sales. The financial impact of the July sales miss is estimated to be about $0.01 per diluted share and, as a result, we expect to hit the low end of our targeted range for earnings this quarter."
In July, Fred's opened three new stores and one pharmacy. Through the first half of fiscal 2007, Fred's has opened 16 new stores and nine pharmacies and has closed 16 stores and four pharmacies. For the full fiscal year 2007, the Company plans to open a total of 30 to 35 new stores, 15 to 25 new pharmacies, and expects to close 20 to 25 stores, netting growth in selling square footage in the range of 1% to 3% for the year.
Fred's Inc. operates 701 discount general merchandise stores, including 24 franchised Fred's stores in the southeastern United States. For more information about the Company, visit Fred's Website at www.fredsinc.com.
Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, general economic trends, changes in consumer demand or purchase patterns, delays or interruptions in the flow of merchandise between the Company's distribution centers and its stores or between the Company's suppliers and same, a disruption in the Company's data processing services, costs and delays in acquiring or developing new store sites, and other contingencies discussed in the Company's Securities and Exchange Commission filings. Fred's undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
Contacts
Fred's Inc.
Jerry A. Shore, 901-362-3733, ext. 2217
Executive Vice President and Chief Financial Officer
Fred's total sales for July increased 6% to $126.5 million from $119.2 million in same month last year. Comparable store sales for the month rose 0.5% on top of a 4.5% increase in July 2006.
Total sales for the second quarter increased 4% to $424.6 million from $406.9 million in the year-earlier period. Comparable store sales for the quarter increased 0.8% versus the same period last year, when Fred's registered a 3.1% increase in comparable store sales.
Fred's total sales for the first half of 2007 increased 5% to $866.9 million compared with $823.8 million in the same period last year. On a comparable store basis, year-to-date sales increased 1.3% versus the first six months of 2006, when Fred's posted a 2.5% gain in comparable store sales.
Commenting on the announcement, Michael J. Hayes, Chief Executive Officer, said, "Sales in July were below our expectations. Softlines, pharmacy and stationery were not as strong as we had planned, while pets and domestics were ahead of plan for the month.
"Helping to offset slower sales, we had lower-than-planned markdowns on back-to-school supplies," Hayes added, "and the shift to generic drugs, as we have said before, should have a largely neutral-to-positive effect on our bottom line because of the increased margin on generics. The roll-out of our merchandise refresher program is complete in almost 300 stores, and those stores continue to post 1%-2% better comparable sales. The financial impact of the July sales miss is estimated to be about $0.01 per diluted share and, as a result, we expect to hit the low end of our targeted range for earnings this quarter."
In July, Fred's opened three new stores and one pharmacy. Through the first half of fiscal 2007, Fred's has opened 16 new stores and nine pharmacies and has closed 16 stores and four pharmacies. For the full fiscal year 2007, the Company plans to open a total of 30 to 35 new stores, 15 to 25 new pharmacies, and expects to close 20 to 25 stores, netting growth in selling square footage in the range of 1% to 3% for the year.
Fred's Inc. operates 701 discount general merchandise stores, including 24 franchised Fred's stores in the southeastern United States. For more information about the Company, visit Fred's Website at www.fredsinc.com.
Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, general economic trends, changes in consumer demand or purchase patterns, delays or interruptions in the flow of merchandise between the Company's distribution centers and its stores or between the Company's suppliers and same, a disruption in the Company's data processing services, costs and delays in acquiring or developing new store sites, and other contingencies discussed in the Company's Securities and Exchange Commission filings. Fred's undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
Contacts
Fred's Inc.
Jerry A. Shore, 901-362-3733, ext. 2217
Executive Vice President and Chief Financial Officer
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.