This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fred's Reports Higher Second Quarter Earnings, Excluding Tax Benefit Recorded In Year-Earlier Period

"Reviewing recent comments expressed by competitors in their quarterly reports and outlooks expressed by industry analysts, we anticipate that the competitive climate will be intense and the operating environment challenging in the second half of the year," Efird continued. "Discretionary spending for lower-income consumers – a key customer segment for Fred's – is expected to remain under pressure. The programs we put in place earlier this year, combined with our pharmacy expansion and the aggressive general merchandising initiatives we have planned in the back half of the year, are designed to meet these economic and competitive challenges. We remain confident that our earnings for the year will fall in the middle to the upper end of the range we earlier projected, with earnings in the second half increasing 14% to 28% over the same period last year and earnings for the full year increasing 17% to 25% over 2012, excluding the tax benefit recorded last year."

Fred's gross profit for the second quarter of 2013 increased 3% to $136.0 million from $131.8 million in the prior-year period. Gross margin for the quarter increased 20 basis points to 28.2% compared with 28.0% in the same quarter last year. Gross profit for the first half of 2013 increased 3% to $287.0 million from $279.6 million in the prior-year period. Gross margin for the six-month period improved 40 basis points to 29.2% compared with 28.8% in the prior-year period. The improvements for the quarter and year-to-date period were driven by an increased pharmacy department gross margin, specifically reflecting the impact of the brand-to-generic mix shift, and better shrinkage control.

Selling, general and administrative expenses for the quarter, including depreciation and amortization, leveraged 20 basis points to 27.1% of sales from 27.3% of sales in the prior-year quarter. The leveraging of expenses in the second quarter was driven by store expense management as well as favorable insurance expense reductions. These improvements were partially offset by the sales impact of the pharmacy department brand-to-generic shift and investments in new pharmacies. In the first half of 2013, selling general and administrative expenses deleveraged 20 basis points to 26.9% from 26.7% of sales in the first half of 2012. The deleveraging in the year-to-date period was primarily attributable to the sales impact of the pharmacy department brand-to-generic shift and investments in new pharmacies.

2 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $92.72 -0.56%
FB $119.49 1.43%
GOOG $711.12 1.38%
TSLA $214.93 1.61%
YHOO $37.23 0.79%


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs