Fred's (FRED) Comps Rose 0.3% in April

Fred's Inc. (NASDAQ: FRED) reported sales for the four-week fiscal month of April and the first quarter of fiscal 2016 that ended on April 30, 2016.

Fred's total sales for the month increased 1% to $163.4 million from $162.2 million in April 2015 as the Company lapped the April 2015 acquisition of EntrustRx specialty pharmacy. Comparable store sales for the month rose 0.3% versus an increase of 0.7% for the year-earlier period.

Fred's total sales for the first three months of fiscal 2016 increased 8% to $549.0 million compared with $509.0 million for the same period last year. On a comparable store basis, year-to-date sales increased 1.0% versus an increase of 0.8% for the year-earlier period.

Commenting on the announcement, Jerry A. Shore, Chief Executive Officer, said, "First quarter total sales and comparable store sales were at the low end of our guidance, primarily as a result of lower-than-anticipated average script price on pharmaceuticals and the impact of severe weather on the front of the store, especially in April. Despite heavy rains and flooding in many of our core markets, Fred's April sales reflected a good mix across most product departments, continuing a trend we have observed since mid-2015. We also witnessed ongoing improvements in health, beauty, personal care, and most hardline departments as comparable store sales for general merchandise remained positive in April. In the pharmacy department, we were pleased to see the best comparable script increase of the year as our traffic-driving initiatives continue to gain traction, especially with the marketing advantages of 90-day scripts.

"With the completion of the first quarter, we are pleased with the progress being made throughout the Company," Shore continued. "We remain on target with the implementation of several important initiatives, including those involving healthcare services, product assortment, store remodels, and technology upgrades, and we continue to see improvement in general merchandise gross margins and all-company operating expense control. Accordingly, we expect that earnings, which we will announce on May 26, 2016, will be within our guidance range for the first quarter."

During April, Fred's opened one full service location and closed one Xpress pharmacy location.

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