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Fred's Inc. (NASDAQ: FRED) today reported higher sales for the four-week fiscal month of October, third quarter and nine-month year-to-date period ended November 2, 2013.
Fred's total sales for the month increased 2% to $143.4 million compared with $139.9 million in October 2012. Comparable store sales for the month increased 0.8% versus a decline of 0.8% in the same period last year.
Total sales for the third quarter of 2013 were $460.5 million, up 2% from $450.6 million in the same period last year. Comparable store sales for the quarter increased 1.4% compared with a decline of 2.5% in the third quarter of 2012.
Fred's total sales for the first nine months of 2013 increased 2% to $1.444 billion compared with $1.422 billion for the same period last year. On a comparable store basis, year-to-date sales increased 1.1% versus a decline of 0.8% in the same period last year.
Commenting on the announcement, Bruce A. Efird, Chief Executive Officer, said, "Sales for October were at the lower end of our guidance as general merchandise sales were sluggish and consumable driven. Poor weather around Halloween hurt sales and consumers tightened spending during the recent budget crisis, with the combination affecting sales and gross margins in the back half of the month. On the positive side, we experienced strong pharmacy sales and a solid performance from our reconfigured departments, especially Hometown Auto & Hardware." Efird noted that reported sales also were reduced by higher comparable layaway sales, which are not recognized for accounting purposes.
"As a result of the October sales performance, we now expect third quarter earnings to be up 5% to 10% over last year," Efird continued. "Forecasts for the upcoming holiday season project a very tough retail environment. In anticipation of these challenges, Fred's merchandising team has maintained inventories at or below last year's levels and has initiated an aggressive and targeted marketing program for the fourth quarter."