Fred's 1Q Profit Increases On Lower Expenses

MEMPHIS, Tenn. (AP) — Discount retailer and pharmacy chain Fred's Inc. said Thursday that its first-quarter profit climbed 18 percent on lower expenses to meet Wall Street's expectations.

The company, which is in the midst of a restructuring, earned $8.6 million, or 21 cents per share, for the three months ended May 2 to meet the expectations of analysts surveyed by Thomson Reuters. Analysts' estimates generally exclude one-time items.

Year-ago earnings were $7.3 million, or 18 cents per share.

Sales slipped 1 percent to $458.4 million from $464.3 million on some store closings. The results topped Wall Street's estimate of $455.3 million.

Selling, general and administrative expenses fell to $108.9 million from $113.7 million during the quarter.

Fred's closed 74 underperforming stores and 23 underperforming pharmacies last year. The company opened three new stores and three new pharmacies in the first quarter, while closing three pharmacies.

Fred's ran 666 discount general merchandise stores, including 24 franchised Fred's stores at year-end.