Fred's Reports April Sales
MEMPHIS, Tenn. -- May 8, 2014
Fred's Inc. (NASDAQ: FRED) today reported sales for the four-week month of
April ended May 3, 2014, and the first quarter of fiscal 2014.
Fred's total sales for the month decreased 1.6% to $150.0 million from $152.4
million in April 2013. Comparable store sales for the month decreased 2.3%
compared with a 1.2% increase in the same period last year.
Fred's total sales for the first three months of fiscal 2014 decreased 0.6% to
$498.5 million compared with $501.5 million for the same period last year. On
a comparable store basis, year-to-date sales decreased 1.9% versus a 1.3%
decrease for the year-earlier period.
Commenting on the announcement, Bruce A. Efird, Chief Executive Officer, said,
"April's sales reflect the limited success of our legacy marketing strategies
in matching up with prevailing intense competitive pressures. Beginning in
late January, we started working with our outside marketing teams and
consultants to uncover new opportunities available to us and adjust our
marketing strategies to regain our sales momentum. Working through extensive
research and building a marketing strategy that can be sustained over the long
term has taken several months to design, develop and validate. One of the key
findings of our research has pointed out that the aggressive use of our new
strategy today is likely to be quickly embraced, based on the demographics of
our customer base. The team has put together a solid marketing plan to
capitalize on Fred's position as a low-price leader and brand our convenience
departments' advantages over small-box competitors.
"Our pharmacy department again demonstrated solid sales gains in April, with
higher sales and comparable store script growth, and our reconfiguration
departments – notably Hometown Auto & Hardware – continued to perform well,"
Efird continued. "However, these improvements were not sufficient to offset
the sales shortfall in the other general merchandise departments, which
experienced negative comparable sales and traffic declines in April. With this
in mind, we now expect first quarter earnings per share to be in the range of
$0.18 to $0.22. As we now begin to implement our new marketing strategy, we
expect to see its impact beginning in June, when we anticipate a return to
positive comparable store sales in the range of 1% to 3%."
During April, Fred's opened three Xpress stores, closed two stores without
pharmacies, and converted one Xpress into a full-service store.
Fred's, Inc. operates 704 discount general merchandise stores, including 21
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 that 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
Jerry A. Shore, 901-362-3733, Ext. 2217
Executive Vice President and Chief Financial Officer
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