Fred's Inc. (NASDAQ: FRED) today reported sales for the four-week month of February, the first month of fiscal 2013, which ended March 2, 2013. Fred's total sales for the month increased slightly to $159.2 million from $159.0 million in February 2012. Comparable store sales for the month declined 1.5% compared with a decline of 0.7% in the same period last year. Commenting on the announcement, Bruce A. Efird, Chief Executive Officer, said, "Considering current economic headwinds, including delays encountered with processing tax returns and refunds as well as increased payroll taxes, we were pleased that February sales were within our projected range for the month. General merchandise comparable store sales were positive for the second consecutive month, reflecting good momentum in new initiatives such as an expanded offering in auto/hardware and our discount tobacco shop. We also saw a solid start to our new spring layaway program, and while sales under this program are deferred until final payments are made and therefore not included in February, they would have added 60 basis points to the month's total and comparable store sales. In the pharmacy department, positive script growth continued, but as in previous months, top-line sales were negatively affected by the ongoing brand-to-generic shift. The effect of this shift on total and comparable store sales was 280 basis points in February." Because of the combination of fourth quarter promotional markdowns on basic and consumable products, as well as year-end adjustments relating to higher-than-anticipated insurance and other operating costs, the Company is reducing its financial guidance for the fourth quarter of 2012. Fred's now expects to report earnings in the range of $0.16 to $0.21 per share for the fourth quarter. Although these adjustments are disappointing, the continued positive results of the auto/hardware expansion will play a major role in the changes we will be implementing in the new year. The Company will release fourth quarter results on March 28, 2013, and during its conference call that day, management will discuss the Company's 2013 reconfiguration program.
During February, Fred's opened one new store and pharmacy location.Fred's, Inc. operates 713 discount general merchandise stores, including 21 franchised Fred's stores, in the southeastern United States. For more information about the Company, visit Fred's website at www.fredsinc.com. Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, general economic trends, changes in consumer demand or purchase patterns, delays or interruptions in the flow of merchandise between the Company's distribution centers and its stores or between the Company's suppliers and same, a disruption in the Company's data processing services, costs and delays in acquiring or developing new store sites, and other contingencies discussed in the Company's Securities and Exchange Commission filings. Fred's undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.