With flat June sales, Fred's expects Q2 to be at low end of projected range

MEMPHIS, Tenn. — Fred's on Thursday reported sales of $179 million for the five weeks ended July 2, representing a relatively flat 0.1% increase, compared with the year-ago period.

Comparable-store sales for the month dropped 0.7%, compared with an increase of 1.7% in the same period last year.

"June sales reflected the volatility experienced with our customers' purchase patterns and demonstrated the broader decline in consumer sentiment that has been reported for the month,” Fred’s CEO Bruce Efird said. “After a solid start in the first half of June, we saw a significant downward adjustment in the last half of the month as customer traffic remained positive but our average customer ticket declined. Another example of the challenging economy was seen in the paycheck cycle, which was very pronounced in the final weeks of the month, but the sales on July 1 were the highest single-day amount for the year,” he said. “Because of less-than-expected May and June sales, we now expect second-quarter earnings to be at the low end of our forecasted range."