Fred's: Foul weather dampens January sales
MEMPHIS, Tenn. — Fred's Super Dollar on Thursday reported $134.8 million in sales for the four weeks ended Feb. 1, representing a 1.1% decline on an adjusted basis. Total sales for the fiscal year totaled $1.9 billion, representing an increase of 1.4% on an adjusted basis.
On an adjusted basis, comparable store sales decreased 1.8% in January versus flat comparable store sales in the year-earlier period. Also on an adjusted basis, comparable store sales for fiscal 2013 increased 0.6% versus a decrease of 1.4% for fiscal 2012.
"The weather was a significant challenge for us in January," stated Bruce Efird, Fred's CEO. "It not only disrupted consumer shopping patterns, but also resulted in more than 120 store closings during the final week of the month. Prior to the last week of January, sales were running in the mid-range of our forecast, with reconfiguration departments leading the way," he reported. "In the final week of the month, comparable store sales dropped into the negative double digits, culminating in a weather effect on comparable store sales for all of January that is estimated at more than 300 basis points."
Efird noted that lower-than-anticipated sales in the last week of January will reduce earnings for the final quarter of 2013 by approximately $0.03 per share. Fred's now expects to report fourth quarter earnings per diluted share in the range of $0.13 to $0.16 cents versus earnings of $0.15 per diluted share for the comparable 13-week period last year.
"With January closing out the fourth quarter, we had success in several areas, most notably in our reconfiguration departments that include pharmacy, pet, auto and hardware, which will carry forward in 2014," Efird said. "We are also in the process of revamping our fourth quarter marketing, promotion and pricing strategies to respond to changing consumer buying habits, along with the increasing popularity of internet shopping. We are confident that our strategies to build a strong presence in specialty pharmacy and clinical services, together with accelerating pharmacy acquisitions and new pricing, promotion and marketing programs, will lead to continued success in 2014."
Fred's sales for the four-week month of January and 52-week fiscal year 2013, which ended Feb. 1, were compared against five-week month and 53-week year-earlier periods. To make the January sales results for 2013 comparable with those of the prior year, Fred's eliminated the first week of the month, quarter and year in 2012 to make similar four-, 13- and 52-week periods.
During January, Fred's opened one new store and two Xpress pharmacies. For the year, Fred's added a net total of 25 new locations, consisting of 11 new stores and 14 new Xpress pharmacies, which was offset by the closing of 25 store locations and eight Xpress pharmacies. The company also opened 26 new pharmacies in 2013 and closed 17, for a net addition of nine pharmacies during the year.