Close

Fred's (FRED) Comps Fell 1.3% in June 2016

July 7, 2016 7:51 AM EDT

Fred's Inc. (Nasdaq: FRED) reported sales for the five-week fiscal month of June, which ended on July 2, 2016.

Fred's total sales for the month of $208.5 million decreased 2.3% compared with $213.3 million in June 2015. Comparable store sales for the month decreased 1.3% versus an increase of 1.6% for the year-earlier period.

Fred's total sales for the first five months of fiscal 2016 increased 3.8% to $923.2 million compared with $889.5 million for the same period last year. On a comparable store basis, year-to-date sales increased 0.1% versus an increase of 0.8% for the year-earlier period.

Commenting on the announcement, Jerry A. Shore, Chief Executive Officer, said, "Although sales for the month were lower than plan, we were encouraged with the front store performance in June. Sales growth in core categories such as health and beauty aids, seasonal, apparel, toys, lawn and garden and electronics helped offset ongoing challenges in paper, chemicals and food that we have discussed on earlier occasions. Consequently, front store comparable sales were positive and increased sequentially from May 2016. This front store progress, however, could not fully offset weaker sales in our pharmacy department, resulting in overall comparable store sales that were below expectation. Lower pharmacy sales reflected the industry-wide slowdown in specialty pharmacy sales attributable to the demand for Hepatitis C drugs as well as a decline in retail sales and scripts, which underscored calendar shifts that benefited May to the detriment of June.

"Looking ahead, we remain confident in the direction of our business and the success of our initiatives to drive future growth and profitability," Shore added. "We continue to see overall front store margin improvement as we expand our assortments in high-margin categories and have plans in place to turn around weaker categories beginning in the third quarter. We expect the retail pharmacy department will remain resilient as our labor management program continues to have a positive impact on our cost to fill. Additionally, the pressured Hepatitis C segment should benefit from new Hepatitis C drugs being introduced in July as well as longer-term company strategies to expand additional therapies."

During June, Fred's closed one full-service location.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Corporate News, Management Comments, Retail Sales

Related Entities

Definitive Agreement