Fred's (FRED) Reports 0.2% Increase in Sept. Comps

Fred's (NASDAQ: FRED) reported sales for the five-week fiscal month of September and eight-month year-to-date period ended October 4, 2014.

Fred's total sales for the month increased 3.3% to $183.6 million from $177.8 million in September 2013. Comparable store sales for the month increased 0.2% on top of an increase of 2.8% in the same period last year.

Fred's total sales for the year-to-date period increased 1.5% to $1.320 billion from $1.301 billion for the same period last year. On a comparable store basis, year-to-date sales decreased 0.5% versus an increase of 0.8% for the year-earlier period.

Commenting on the announcement, Bruce A. Efird, Chief Executive Officer, said, "Our September comparable store sales continued the positive trend we have experienced in recent months in spite of the strong sales performance posted in the same month last year. Our initiatives to emphasize our convenience-center model continue to gain traction throughout the business. Driving customer traffic remains a challenge in our markets, but the implementation of these initiatives is clearly beginning to produce positive results. General merchandise inventory has been significantly lowered and our clearance programs to address unproductive inventory, once again, exceeded the sales plan for September. Additionally, our pharmacy department performed well with increases in both comparable scripts and sales. We are very excited to have our new pharmacy prime vendor agreement in place, which will not only accelerate gross margin improvement in the pharmacy department, but will also support our pharmacy expansion initiatives."

Efird added, "We are confident about the success of our initiatives to reposition the convenience-center model, expand marketing and implement new technology. In addition, we are optimistic about the process changes taking place in general merchandising and the pharmacy prime vendor contract now in effect. These factors will help restore growth and position Fred's for enhanced financial performance in the fourth quarter of 2014 and next year."

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