Fred's, Inc. (NASDAQ:FRED) today reported sales for the four-week fiscal month, second quarter and six-month period ended July 28, 2012.
Fred's total sales for the month increased 5% to $136.7 million from $129.7 million in July 2011. Comparable store sales for the month increased 1.2% versus a decrease of 0.5% in the same period last year.
Fred's total sales for the second quarter of fiscal 2012 increased 4% to $470.7 million compared with $452.7 million for the same period last year. On a comparable store basis, second quarter sales decreased 1.0% compared with a decline of 0.4% in the same period last year.
Fred's total sales for the first six months of fiscal 2012 also increased 4% to $971.2 million compared with $937.1 million for the same period last year. On a comparable store basis, year-to-date sales decreased 0.5% versus an increase of 0.4% in the same period last year.
Commenting on the announcement, Bruce A. Efird, Chief Executive Officer, said, "We were pleased to see our comparable store sales bounce back in July to finish the quarter on a stronger note. The increase for the month primarily reflected promotions aimed at driving customer traffic, which worked well for us and resulted in a significant improvement from recent months. Our Core 5 areas of Pet, Household Supplies and Pharmacy were standouts in July, with pharmacy benefiting from continued growth in script counts during the month. Also, the sales performance of our newer stores and pharmacies continued to exceed expectations, extending a trend we have seen throughout this year."
Efird noted that second quarter earnings will be affected by the ongoing shift in sales mix toward consumables, along with added costs associated with July sales promotions and one-time store closing costs during the quarter. Offsetting these pressures, the Company completed negotiations with the State of Tennessee for the settlement of a tax matter, which will benefit second quarter earnings. As a result of these factors, Fred's now expects that earnings per diluted share for the second quarter of 2012 will be in the range of $0.17 to $0.19. Fred's plans to report second quarter results on August 23, 2012.