Fred's (FRED) Says May Sales Fell 1%; Comps Dropped 0.4%

Fred's Inc. (NASDAQ: FRED) reported sales for the four-week fiscal month of May, which ended on May 28, 2016.

Fred's total sales for the month decreased 1% to $164.8 million from $167.2 million in May 2015. Comparable store sales for the month declined 0.4% versus an increase of 0.3% for the year-earlier period.

Fred's total sales for the first four months of fiscal 2016 increased 6% to $714.4 million compared with $676.2 million for the same period last year. On a comparable store basis, year-to-date sales increased 0.7% versus an increase of 0.6% for the year-earlier period.

Commenting on the announcement, Jerry A. Shore, Chief Executive Officer, said, "May comparable store sales were within the range of expectation as outlined last week in our first quarter 2016 earnings press release and conference call. We further note that retail pharmacy experienced growth in both comparable sales and script counts in May, as our marketing efforts began to gain traction. Additionally, in general merchandise, our sales mix remained favorable as higher-margin categories were strong in May.

"As we enter June and the hot summer months ahead, we expect to see a lift in those general merchandise departments that are positively influenced by warm weather, where our broader assortment is a competitive advantage," Shore added. "We also expect that improvements in retail pharmacy script growth will continue as we expand our healthcare marketing and clinical services. Meanwhile, we remain focused on driving all of our initiatives forward and are confident that the investments we are making in our business will help us deliver our expected earnings growth in 2016."

During May, Fred's closed six locations, none of which had a pharmacy department.

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