Fred's July Comparable Store Sales Increase 0.7% - Quick Facts

(RTTNews) - Fred's Inc. (FRED) reported that its Comparable store sales for the four-week month of July, which ended August 1, 2015 increased 0.7%, the same as in the year-earlier period.

Fred's total sales for the month increased 11% to $164.7 million from $148.9 million in July 2014. Excluding $5.6 million from last year's July sales related to 57 subsequently closed locations, total sales increased 16% for the month.

Fred's total sales for the second quarter of fiscal 2015 increased 11% to $545.2 million from $491.2 million for the same period last year. Excluding sales of $19.2 million from stores closed in 2014, total sales increased 16% for the second quarter of 2015. On a comparable store basis, second quarter sales increased 0.9% versus a decline of 0.1% for the year-earlier period.

Jerry A. Shore, Chief Executive Officer, said, "July sales continued to reflect the solid contribution of our recently expanded specialty pharmacy business, which comprised approximately 12% of our total sales for the month. July's comparable store sales performance, however, did not meet our internal expectations as we continued to confront strong headwinds in retail pharmacy sales caused by several factors."

The company now estimates a net loss in the range of $0.10 to $0.15 per share for the second quarter. This includes an unexpectedly large increase in LIFO expense, a non-cash item that accounts for approximately $0.06 of the estimated per-share loss for the quarter that was not in its prior plan. Adjusted EBITDA, which adds back LIFO and stock compensation expenses, is expected to be in the range of $8 to $9 million for the quarter versus a negative $14 million in the year-ago quarter.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.03 per share for the second-quarter. Analysts' estimates typically exclude special items.

Looking ahead, the company expects to see a continuation of improving trends in general merchandise departments as its merchandising and marketing initiatives gain further traction.