MEMPHIS, TENN. (

TheStreet

) --

Fred's

profit tripled in the second quarter due to stringent cost cuts, offsetting a sales decline.

But shares of the company still shed 1% Thursday morning to $13.43.

In the just-ended quarter, the discounter said it earned $4.2 million, or 11 cents a share, compared with $1 million, or 3 cents a share, in the year-ago period.

Excluding one-time items, the company posted adjusted earnings of 13 cents a share, matching analysts' expectations.

Sales slipped 3% to $434.2 million from $447.1 million, while same-store sales fell 1.3%.

Fred's issued guidance for the third quarter and full year in line with Wall Street forecasts. The company expects third-quarter EPS of between 18 cents and 21 cents and full-year EPS in the range of 73 cents to 80 cents.

Discounters have been fairing well amid the recession. On Wednesday,

Dollar Tree

(DLTR) - Get Report

said its second-quarter profit doubled from a year ago. The company also upped its full-year guidance.

And earlier this month,

99 Cents Only Stores ( NDN) swung to a profit in its second quarter

as same-store sales surged 23.6%.

-Reported by Jeanine Poggi in New York.

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