MEMPHIS, Tenn.--(BUSINESS WIRE)--Fred's Inc. (NASDAQ: FRED) today reported sales for the four-week month of January and 52-week fiscal year 2013, which ended February 1, 2014, versus five-week month and 53-week year-earlier periods.
On an unadjusted basis, Fred's total sales for January 2014 were $134.8 million compared with $173.5 million for the five-week year-earlier period. On an unadjusted basis, fourth quarter total sales were $495.1 million compared with $533.4 million for the year-earlier quarter. Total sales for 52-week fiscal 2013 were $1.939 billion versus $1.955 billion for 53-week fiscal 2012.
To make the January sales results for 2013 comparable with those of the prior year, the Company eliminated the first week of the month, quarter and year in 2012 to make similar four-, 13- and 52-week periods. On this adjusted basis, total sales decreased 1.1% for January, increased 0.5% for the fourth quarter, and increased 1.4% for fiscal 2013. On an adjusted basis, comparable store sales decreased 1.8% in January versus flat comparable store sales in the year-earlier period. The fourth quarter comparable store sales, on an adjusted basis, increased 0.1% compared with a decrease of 2.8% in the prior-year period. On an adjusted basis, comparable store sales for fiscal 2013 increased 0.6% versus a decrease of 1.4% for fiscal 2012.
Commenting on the announcement, Bruce A. Efird, Chief Executive Officer, said, "The weather was a significant challenge for us in January. It not only disrupted consumer shopping patterns, but also resulted in more than 120 store closings during the final week of the month. Prior to the last week of January, sales were running in the mid-range of our forecast, with reconfiguration departments leading the way. In the final week of the month, comparable store sales dropped into the negative double digits, culminating in a weather effect on comparable store sales for all of January that is estimated at more than 300 basis points."
Efird noted that lower-than-anticipated sales in the last week of January will reduce earnings for the final quarter of 2013 by approximately $0.03 per share. Fred's now expects to report fourth quarter earnings per diluted share in the range of $0.13 to $0.16 cents versus earnings of $0.15 per diluted share for the comparable 13-week period last year.
"With January closing out the fourth quarter, we had success in several areas, most notably in our reconfiguration departments that include pharmacy, pet, auto, and hardware, which will carry forward in 2014," Efird continued. "We are also in the process of revamping our fourth quarter marketing, promotion and pricing strategies to respond to changing consumer buying habits, along with the increasing popularity of internet shopping. We are confident that our strategies to build a strong presence in specialty pharmacy and clinical services, together with accelerating pharmacy acquisitions and new pricing, promotion and marketing programs, will lead to continued success in 2014."
During January, Fred's opened one new store and two Xpress pharmacies. For the year, Fred's added a net total of 25 new locations, consisting of 11 new stores and 14 new Xpress pharmacies, which was offset by the closing of 25 store locations and eight Xpress pharmacies. The Company also opened 26 new pharmacies in 2013 and closed 17, for a net addition of nine pharmacies during the year.
Fred's, Inc. operates 704 discount general merchandise stores, including 21 franchised Fred's stores, in the southeastern United States. For more information about the Company, visit Fred's website at www.fredsinc.com.
Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, general economic trends, changes in consumer demand or purchase patterns, delays or interruptions in the flow of merchandise between the Company's distribution centers and its stores or between the Company's suppliers and same, a disruption in the Company's data processing services, costs and delays in acquiring or developing new store sites, and other contingencies discussed in the Company's Securities and Exchange Commission filings. Fred's undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
