Fred's, Inc. (NASDAQ: FRED) today reported improved financial results for the fourth quarter and fiscal year ended January 28, 2012.
For the fourth quarter ended January 28, 2012, Fred's net income increased to $9.8 million compared with net income of $8.6 million in the year-earlier period, with earnings per diluted share rising 23% to $0.27 from $0.22 in the fourth quarter last year. In the quarter, a favorable adjustment to the Company's income tax rate added $0.02 to earnings per diluted share. Excluding the income tax rate effect, earnings per diluted share for the fourth quarter of 2011 increased 14% compared with fourth quarter 2010. For the fiscal year 2011, Fred's net income increased to $33.4 million compared with net income of $29.6 million for 2010, with earnings per diluted share rising 16% to $0.87 from $0.75 last year.
Fred's total sales for the fourth quarter of fiscal 2011 increased 2% to $497.6 million from $485.6 million for the same period last year. Comparable store sales for the quarter increased 0.1% on top of a 2.3% increase for the fourth quarter last year. Fred's total sales for fiscal 2011 increased 2% to $1.879 billion from $1.842 billion for the same period last year. Comparable store sales for fiscal 2011 increased 0.5% on top of an increase of 2.2% for the same period last year.
Commenting on the results, Bruce A. Efird, Chief Executive Officer, said, "We are pleased to report an improved performance and solid results for the fourth quarter, with earnings per diluted share 23% ahead of a strong prior-year quarter. Considering the ongoing challenges in the economy and an extremely competitive quarter, our marketing and operating strategies positioned us to manage gross margins and operating expenses, while maintaining the strength of our balance sheet."During 2011, we focused on our key strategic goals: building customer traffic, increasing market share, and accelerating growth. Both customer traffic and market share increased for the year, and new store openings were up 70% for 2011 with the opening of 26 new stores and 24 pharmacies. Also, we upgraded more than 200 existing stores with the elements of our Core 5 program – bringing the two-year total of upgrades to more than 400 stores."