Fred’s reports drop in sales for end of year 2008

MEMPHIS, Tenn. Discount retailer Fred’s on Wednesday reported a decline of 4% in December sales, posting $201.6 million for the five weeks ended Jan. 3.

“December sales continued to reflect a tough economic environment,” Fred’s CEO Michael Hayes. “Fred’s consumable departments delivered positive comparable results, offset by lower comparable sales in the more discretionary departments, the result of which was flat comparable store sales for the month. Because we have built and executed inventory and cost control plans to address expected volatility in the economy and consumer spending, ending inventories for December were on plan and 5 percent below last year, and the company remains within the forecasted financial range for the fourth quarter.”

Excluding stores closed during 2008, total sales from ongoing stores increased 2 percent in December versus the same month last year. Comparable store sales for the month were flat versus a 1.8 percent decline in comparable store sales for December 2007.