MEMPHIS, Tenn.--(BUSINESS WIRE)--Fred's Inc. ("Fred's Pharmacy" or "the Company") (NASDAQ:FRED) today reported sales for the four-week fiscal month of February, the first month of fiscal 2017, which ended February 25, 2017.
Fred's total sales for the month decreased 3.5% year-over-year to $165.4 million from $171.4 million in February 2016. Total comparable store sales for the month declined 4.0% compared with a 0.8% increase in comparable sales in the prior year period.
Commenting on the announcement, Michael K. Bloom, Chief Executive Officer, said, “Despite the tax refund delay impacting a significant percentage of our customer base and our front of store sales, we are pleased with the progress we are making against our strategic plan, demonstrated by our continued improvement in Retail and Specialty Pharmacy. This is an affirmation that our healthcare strategy is working. Notably, comparable store sales in our overall Pharmacy business were strong in the month, driven by positive adjusted prescription comparisons.”
Mr. Bloom continued, “Progress against our strategic plan in the front of store was offset in February by the significant delay of individual tax refunds, which are down approximately 13% year-over-year.1 However, comparable sales in our front of store improved in the last week of February as individual refunds were received by customers. Looking ahead to March and the remainder of the first quarter, we expect customer spending will continue to increase as tax refunds are received.
“We continue to execute on our strategic initiatives aimed at providing healthcare services and value merchandise in the markets we serve. We remain confident in our long-term transformational strategy to capitalize on the opportunity to grow sales and enhance value for our shareholders.”
Fred's Pharmacy and its subsidiaries operate 643 discount general merchandise stores and three specialty pharmacy-only locations in 15 states in the southeastern United States. Included in the store count are 14 franchised locations. Also, there are 354 full service pharmacy departments located within Fred's stores, including one franchised location. 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. A reader can identify forward-looking statements because they are not limited to historical facts or they use such words as "outlook," "guidance," "may," "should," "could," "believe," "anticipate," "plan," "expect," "estimate," "forecast," "goal," "intend," "committed," "continue," or "will likely result" and similar expressions that concern the Company's strategy, plans, intentions or beliefs about future occurrences or results. These risks and uncertainties include, but are not limited to, those associated with the Company's announced strategic plan, the ultimate terms of the reworked pharmacy distribution agreement, lease buyouts and the underlying assumptions and projections upon which they are based, as well as risks that intended results may not be achieved or may not occur as quickly as expected; the success of announced acquisition activities and future growth trends in businesses acquired; 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; cyber-security threats; costs and delays in acquiring or developing new store sites; and the factors listed under "Risk Factors" in the Company's most recent Annual Report on Form 10-K and any subsequent quarterly filings on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made. 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.
1 Based on data released by the U.S. Department of Treasury as of Friday, February 24, 2017.