Fred's posts January 5% sales, 1.9% comps declines

2/5/2009

MEMPHIS, Tenn. Discount retailer Fred’s on Thursday recorded a 5% decline in sales for the four weeks ended Jan. 31, posting $126.1 million.

Excluding stores closed during 2008, total sales from ongoing stores were flat in January, versus the same month last year, the company reported. Comparable store sales for the month declined 1.9%.

"We were disappointed by January sales, particularly in the last week of the month, where the impact of the slumping economy, combined with severe ice storms and adverse weather in several of our markets, resulted in negative comparable sales for that week that reached into the high single digits,” stated Fred’s chairman Michael Hayes.

“We estimate the impact of the adverse weather and related store closings on comparable-store sales for the month to be in the range of 0.5% to 1%,” Hayes continued. “Also, while customer traffic was positive for the month, the increase was more than offset by a downturn in average transaction amount, as sales for January were driven by lower pharmacy sales, since the cold and flu season has not yet developed, and conservative purchasing patterns by customers that are focused on promotional items and basic product mix.”

Fred's total sales for the 13-week fourth quarter decreased 5% to $469.4 million. Comparable-store sales for the fourth quarter decreased 1.1%, compared with a decline of 2.5% in the fourth quarter last year.

Total sales for fiscal 2008 increased 1% to $1.8 billion. Comparable-store sales for 2008 rose 1.8%, versus a 0.3% gain for the prior year.

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