Fred’s beats Street on loss, misses on sales

Memphis, Tenn. – Fred’s Inc. beat Wall Street expectations for profit despite swinging to a net loss of $29,000 in the first quarter of fiscal 2015 from net income of $6.1 million in the same period the prior year. The retailer missed on net income of $509 million, up 2% from $498.3 million.



Higher salary and benefit costs helped move Fred’s into the red. 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%.