Fred's posts 4.6% comps increase

MEMPHIS Fred's reported July sales of $129.7 million, a rise of 3% from $126.5 million in July 2007. Excluding stores closed, total sales from ongoing stores increased 7% over last year. Comparable-store sales for the month increased 4.6%, versus an increase of 0.5% last year.

Total sales for the second quarter rose 5% to $447 million from $424.6 million in the year-earlier period. Comparable-store sales for the quarter increased 4.9%, compared with an increase of 0.8% in the second quarter of 2007.

"We are gratified to see continued strength in our sales during July, allowing us to reach the year's midpoint with sales and traffic growth that are ahead of plan," said ceo Michael J. Hayes. "In turn, our strong sales have offset the margin pressures in the quarter resulting from inflation and reduced discretionary spending, positioning us to hit the higher end of our earnings projections for the period.

"The internal initiatives we have set in motion over the past year and a half have enabled us to capitalize on what we see as a consumer trend toward value and convenience in response to mounting economic pressures," Hayes continued. "This success is evident from our better-than-plan sales performance for the first half of 2008, and additional validation can be seen in the continued gains in traffic and comparable-store sales for our market niche, which come while many other retailers are reporting an increasingly difficult sales environment.

"Thus, as we enter the back half of the year, we remain confident about the initiatives we have put in place, and those we plan to execute in the third and fourth quarters of 2008," continued Hayes. "Although the current economic environment is pressuring gross margins, and will likely continue to do so in the second half of the year, we believe our short- and long-term initiatives will produce ongoing success, positioning us to achieve the goals we outlined in our strategic plan announced in February."