Fred’s Inc. (FRED), which sells general merchandise through retail discount stores and pharmacies, had healthy sales for the four-week period ended May 29, 2010.
Comparable-store sales for the month rose 3.5% compared with a growth of 0.2% in the comparable period last year. Comps were up marginally in April 2010. The retailer has been registering positive comparable-store sales growth for every month of 2010, except January.
Year-to-date, comparable-store sales climbed 3.5% compared with a growth of 2.1% in the same period last year.
Continuing the top-line growth momentum, May sales surged 5% to $141.5 million from $134.9 million registered in the corresponding period a year ago. For the month under review, Fred experienced positive traffic and a strong ending before the Memorial Day holiday due to the discounter’s sales-driving initiatives. Despite economic uncertainty and soaring redundancy, the positive growth trend in sales positions Fred’s well to capitalize on its customers.
Fred guided its annual sales growth of 5% – 7% in the second quarter of 2010. The store sales are expected to surge 2% – 4% in the second quarter versus a dip of 1.3% registered in the comparable period last year.
Fred, the operator of 670 discount general merchandise stores, forecasts earnings of 12-15 cents a share and 72-79 cents a share for the second quarter and fiscal 2010, respectively. The company’s fiscal 2010 guidance is in line with the current Zacks Consensus Estimate but falls short of the estimate of 18 cents a share for the second quarter.
Based in Memphis , Tennessee , Fred offers pharmaceuticals, household goods, food and tobacco products, apparel and linens, health and beauty aids, household cleaning supplies, disposable diapers, pet foods, paper products, and various beverage products principally to low, middle, and fixed income families.
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