Fred's profit rises in Q2

MEMPHIS — Fred's reported that net income for the second quarter ended July 28 rose 19% to $6.1 million, compared with $5.1 million in the year-ago period.

Sales rose 4% to $470.8 million from $452.7 million, and same-store sales dipped 1%.

Profit results missed Wall Street expectations, and the discounter has lowered its full-year earnings forecast.

Commenting on the results, Fred's CEO Bruce Efird said, "As we look ahead to the second half of the year, we expect that the macroeconomic environment in our region of the country will continue to lag the national numbers and anticipate an intensely competitive retail environment during the third and fourth quarters. Expecting little benefit from the economic environment, we have accelerated several major merchandising initiatives, increased our marketing spend for the third and fourth quarter print and electronic media, and have increased the pace of pharmacy acquisitions – all directed at adding and rebuilding customer traffic."