Fred’s reports sales decline for December, but year-to-date gains

MEMPHIS, Tenn. Fred’s total sales for the five-week fiscal month of December declined to $210 million from $221.5 million in December 2006. The company said sales were adversely affected by fewer pre-Christmas shopping days in the fiscal December month for 2007. Comparable store sales for December declined 1.8 percent compared with a 2 percent increase in the same month last year.

Total sales for the year-to-date period ended Jan. 5, 2008 increased 3 percent to a record $1.65 billion from $1.60 billion in the first 11 months of 2007. On a comparable store basis, year-to-date sales for 2007 increased 0.4 percent versus a 2.4 percent gain in the same period last year.

Commenting on the announcement, Michael Hayes, chief executive officer, said, “As has been the case for months, the retail environment continues to be pressured by mounting economic concerns, keeping customers conservative in their spending. Because of these weaker conditions, our sales for December came in at the low end of our revised plan for the month, which foresaw comparable store sales declining as much as 2 percent. In addition, December sales reflected a more promotion-driven customer, leading to higher-than-planned markdowns across most of our product categories. The impact of December’s lower sales and accelerated markdowns is expected to reduce our fourth-quarter earnings by five cents.”

Hayes noted that Fred’s opened two stores and one pharmacy in December.