Fred's Super Dollar credits specialty pharmacy for strong January sales lift

MEMPHIS, Tenn. - Fred's Super Dollar on Thursday reported total sales of $155.7 million for the four weeks ended Jan. 30, an increase of 12%. Comparable store sales for the month rose 0.7% on top of an increase of 4.3% in the year-earlier period.

 

"Growth in total sales for January primarily reflected the continued strength of our expanded specialty pharmacy operations, and comparable store sales were largely in line with expectations, which incorporated no 'first of the month' benefit in this final fiscal month of the year," stated Jerry Shore, Fred's CEO. "Meanwhile, retail pharmacy sales lagged plan; the ongoing impact of a very low incidence of cold and flu activity reduced January's overall comparable store sales by approximately 150 basis points. Flu activity in Fred's primary states was less than half the pace of last year."

 

Fred's total sales for the fourth quarter of 2015 increased 10% to $553.8 million. Excluding sales of $16 million from stores closed in the fourth quarter of 2014, total sales increased 13% for the fourth quarter of 2015. On a comparable store basis, fourth quarter sales increased 1.7% versus flat comparable store sales in the fourth quarter of last year.

 

"Fred's fourth quarter comparable sales gain of 1.7% marked a solid start for the initiatives we launched to drive sales," Shore added. "These efforts helped us establish solid momentum in 2015 across most lines of our business, and we believe we have now laid a strong foundation to build on that momentum," je said. "Still, we do not believe this progress will offset the ongoing headwinds we have experienced in our pharmacy department with an unexpectedly sharp decline in cold and flu scripts and sales, resulting in deeper gross margin pressure on the quarter. Accordingly, we now expect adjusted earnings per share to be in the range of $0.07 to $0.12 for the fourth quarter of 2015."

 

Fred's total sales for fiscal 2015 increased 9% to $2.2 billion. Excluding sales of $71.7 million from stores closed mainly in late 2014, total sales increased 13% for fiscal 2015. On a comparable store basis, fiscal 2015 sales increased 1.5% versus a decrease of 0.6% for fiscal 2014.

 

"We are very pleased with Fred's considerable progress in 2015, as the team has been upgraded throughout the organization and new programs have been designed for 2016 to advance all areas of our business," Shore continued. "Key priorities for us in 2016 will be to drive traffic by improving the total store experience, continue to improve general merchandise profitability and extend the rapid growth of our specialty pharmacy and retail healthcare services."