Drug costs weigh on Fred's profit

Higher prices for generic drugs contributed to a net loss of $29,000 for Fred's in the first quarter.

In the quarter that ended April 30, Fred’s posted a $29,000 loss, or nearly one cent per share, compared to a profit a year earlier of $6.12 million, or 17 cents a share. Sales rose 2.2 percent to $509 million. Total sales rose 7%.Same-store sales climbed 0.8%.



Jerry A. Shore, CEO, said pharmacy is a critical component of Fred’s strategy for profitability moving forward.



“We continued to see further strengthening in Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), which for the first quarter was at the high end of guidance,” said Shore. “We believe this trend in EBITDA demonstrates the meaningful change now underway at our company as we continue to focus on an updated, convenient, and pharmacy-centric Fred's.”



Fred’s expects total sales for second quarter 2015 to increase in the range of 16% to 19%. Same-store sales for the second quarter are expected to increase in the range of 1% to 3%.