Fred's (FRED) Misses Q4 EPS by 2c; Issues Light Q1, FY16 Outlook

Fred's (NASDAQ: FRED) reported Q4 EPS of $0.07, $0.02 worse than the analyst estimate of $0.09. Revenue for the quarter came in at $554.6 million versus the consensus estimate of $557.25 million.

Comparable store sales increased 1.7% for the fourth quarter and 1.5% for the full year, achieving Company guidance and marking the best sales performance since 2010.

The Company provides the following guidance for the first quarter of 2016 and the upcoming full fiscal year, which does not include an estimate of future data breach-related expenses:

• Total sales for the first quarter of 2016 are expected to increase in the range of 8% to 12%.
• Comparable store sales for the first quarter are expected to increase in the range of 1% to 3% compared with an increase of 0.8% in the first quarter last year.
• Earnings per diluted share for the first quarter are forecasted to be in the range of flat to $0.03 compared with essentially flat earnings per share last year. (The Street sees Q1 EPS of $0.08.)
• Adjusted EBITDA for the first quarter is forecasted to be in the range of $13 million to $16 million, compared with $11.6 million last year, an increase of 10% to 35%.
• Based on this outlook, the Company expects total sales for the year to increase in the range of 5% to 9%.
• Comparable store sales for the year are expected to increase in the range of 2% to 5% compared with an increase of 1.5% for fiscal 2015. The estimated contribution from specialty pharmacy sales growth to total Company comparable sales is approximately 100 to 200 basis points.
• Earnings per diluted share for the year are forecasted to be in the range of $0.27 to $0.32 compared with adjusted earnings per diluted share of $0.09 for fiscal 2015. (The Street sees EPS of $0.35.)
• Adjusted EBITDA for the year is forecasted to be in the range of $73 million to $78 million, an increase of 35% to 45% over adjusted EBITDA for fiscal 2015.

For earnings history and earnings-related data on Fred's (FRED) click here.

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