Fred's Expects 1Q Earnings Within Street View

MEMPHIS, Tenn. (AP) — Discount retailer and pharmacy chain Fred's Inc. said Thursday that it expects first-quarter earnings within the range of analysts' estimates after posting a fourth-quarter profit on fewer charges.

The company, which is in the midst of a restructuring and recently named a new chief executive, anticipates net income of 19 cents to 21 cents per share.

Analysts polled by Thomson Reuters, whose estimates generally exclude one-time items, predict a first-quarter profit of 20 cents per share.

Fred's expects sales to drop 2 percent to 4 percent, which would imply revenue of $445.8 million to $455 million for the quarter. The company reported sales of $464.3 million in the prior-year period.

Analysts forecast revenue of $447.4 million.

The company expects a same-store sales increase of 1 percent to 3 percent.

Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

Also on Thursday, Fred's reported a fourth-quarter profit of 6 cents per share. Adjusted earnings were 20 cents per share, which excluded some charges. Analysts predicted net income of 22 cents per share and typically exclude one-time items.

Fred's shares fell 63 cents, or 5.4 percent, to $11 in morning trading.