Fred's posts slight December decline; looks forward to strong 2013 with expansion in pharmacy, specialty drugs
MEMPHIS, Tenn. — Fred's on Thursday reported a 1% sales decline to $209.9 million for the five-week fiscal month ended Dec. 29. Comparable store sales for the month decreased 4.2% compared with a decline of 0.4% in the same period last year.
"December sales did not meet our expectations as customers limited their purchases of discretionary and weather-related merchandise again this month," stated Bruce Efird, CEO Fred's. "The economic headwinds around the holidays overshadowed some of the positive aspects of the company's performance in December, like the successful completion of our layaway sales program and continued script improvement in our pharmacy department."
Efird said that, with the sales shortfall Fred's experienced in November and December, the company now expects fourth quarter earnings per share to be in the range of $0.25 to $0.31.
"Looking ahead, we begin 2013 with many new programs and initiatives designed to improve customer traffic," Efird said. "We will accelerate pharmacy growth through expanded programs in specialty drugs and clinical services, as well as by increasing the pace of pharmacy acquisitions," he said. "We expect that 2013 will be a springboard year for Fred's with the expansion of specialty drugs and clinical services, accelerated pharmacy acquisitions, new auto and hardware product initiatives, the rollout of a smaller drug and dollar store concept, and the beginning of the relocation of approximately 125 stores."
In general merchandise departments, Fred's is expecting a positive impact from discount tobacco programs and its new Hometown Auto and Hardware program, which will grow from 80 to 200 stores in 2013. Fred's also is expanding its merchandise assortment across seasonal, which is designed to complement the new hardware program.
During the month, Fred's opened four new stores and one Xpress pharmacy and closed two Xpress pharmacy locations.
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