) reported decent total sales and comparable sales for Jun 2013,
against the year-ago period. Comparable store sales for the month
climbed 4.5% compared with a fall of 4.0% in the year-ago
Customer traffic increased in June on the back of the
reconfiguration of general merchandise and improved weather
Growth in script counts led to positive comparable store sales
in the pharmacy department for the first time in 10 months.
Decent sales in the Lawn & Garden, Summer Toys and
Seasonal departments boosted total sales for the month by 3.0%
year over year to $187.7 million.
For the first five months of fiscal 2013, comparable store
sales were flat compared to the same period a year ago. Fred's'
total sales inched up 1.0% to $841.6 million compared with $835.1
million for the same period last year.
After closing 20 stores and opening a net of two new stores
and one new pharmacy locationduring Jun 2013 Fred's now operates
697 discount general merchandise stores, including 21 franchised
Second quarter of fiscal 2013
Fred's reiterated its second-quarter guidance keeping in view
the results of the first two months of the quarter. For the
second quarter of fiscal 2013, Fred's forecasts its total sales
to increase in the range of 2% to 4%, while it expects comparable
store sales to be flat in the second quarter. The company expects
earnings to remain within a range of 6 cents - 9 cents per share
in the quarter.
Management is well on track to improve its pharmacy department
growth, expand its specialty drug program, and roll out its
expanded auto and hardware programs. However, the company
continues to expect tough retail conditions to continue across
the markets in fiscal 2013. In addition, declining comparable
store sales over the past several months remains a concern.
Currently, Fred's carries a Zacks Rank #2 (Buy).
Other diversified retailers worth considering include
Dollar Tree, Inc.
). While Restoration carries a Zacks Rank #1 (Strong Buy), Dollar
Tree and Ross Stores hold a Zacks Rank #2.
DOLLAR TREE INC (DLTR): Free Stock Analysis
FREDS INC (FRED): Free Stock Analysis Report
RESTORATION HDW (RH): Free Stock Analysis
ROSS STORES (ROST): Free Stock Analysis
To read this article on Zacks.com click here.