May sales for Fred's rise as comps fall short

MEMPHIS, Tenn. — Fred's on Thursday reported sales of $143.5 million for the four weeks ended May 28, up 1%. Comparable-store sales for the month rose 0.2%, compared with an increase of 3.5% in the same period last year.

“The combination of high fuel prices and historic weather events across our markets has caused our customers to become more conservative in discretionary spending,” Fred’s CEO Bruce Efird said. “This was evidenced by the decrease in average customer transaction amount in May, which was offset by the increase in positive customer traffic,” he said. “We were pleased with the performance of our Core 5 program in May, especially in pets, household supplies and pharmacy, as we continue to anticipate an increase in comparable sales in the range of 1% to 2% for the second quarter."

Fred's total sales for the first four months of fiscal 2011 increased 2% to $627.9 million. On a comparable-store basis, year-to-date sales increased 0.8% on top of an increase of 2.5% in the same period last year.

Through May, Fred's completed 79 of its planned 200 store remodels and upgrades. Additionally, one new store opened during the month.