) reported total sales and comparable sales for Apr 2013 that
were higher than the year-ago period. Comparable store sales for
the month climbed 1.2% compared with a decline of 0.3% in the
year-ago month. Strong performance of the general merchandise and
higher customer traffic led to the rise in same store sales
during the month. Total sales for Apr 2013 increased 3% to $152.2
million compared with $147.6 million a year ago.
Although sales were partly hampered due to poor weather
conditions and negative impact of the ongoing shift from branded
to generic drugs, strong sales from the higher margin products
following the company' s investment in redesigning its
assortments led to sales growth.
For the first three months of fiscal 2013, comparable store sales
declined 1.3% compared to 0.4% decline in the same month a year
ago. Fred's' total sales inched up to $501.4 million compared
with $500.5 million for the same period last year.
Fred's asserted that it is well on track to achieve its growth
targets in the first quarter of fiscal 2013. While announcing its
March sales, the company has revealed that it expects tough
retail conditions to continue across the markets in fiscal 2013.
Comparable store sales, including one extra week, are expected to
decrease by 1% to 3% in the first quarter due to weak sales in
March. The company expects to record earnings within the range of
26 cents-30 cents per share in the quarter.
For fiscal 2013, Fred's expects earnings to drop 77 cents-88
cents per share compared with fiscal 2012. However, excluding the
impact of favorable income tax adjustment of 12 cents per share
on 2012 results, earnings per share is expected to increase 12%
to 28% in the year. The Zacks Consensus Estimate is pegged at 29
cents per share for the first quarter and 82 cents for fiscal
We, however, are not optimistic about the outlook provided by
Fred's. A tough retail environment and declining comparable store
sales over the past several months remain a concern. Currently,
Fred's carries a Zacks Rank #5 (Strong Sell).
If you are looking for a diversified retailer, it might not be a
bad idea to check out
The TJX Company
). All of them carry a Zacks Rank #2 (Buy).
COSTCO WHOLE CP (COST): Free Stock Analysis
FREDS INC (FRED): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis
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