Specialty pharmacy helps Fred's Super Dollar realize 12% growth in June

MEMPHIS, Tenn. — Fred's super Dollar reported a June sales increase of 12% to $212.9 million on Thursday. Excluding $7.4 million from last year's June sales for 56 subsequently closed locations, total sales increased 16% for the month. Comparable store sales for the month increased 1.6% compared with a decrease of 0.6% in the same period last year.

 

“The strong sales growth we experienced during June continued to reflect the recent expansion of our specialty pharmacy business, which accounted for approximately 11% of total sales," stated Jerry Shore, Fred's CEO. "On a comparable store basis, June sales were on the lower end of our expectations, reflecting softer retail pharmacy department script volume and increasing reimbursement rate pressures associated with preferred Medicare Part D networks, which affects both sales and margins. On the other hand, general merchandise sales showed improvement in June and, on a comparable store basis, were flat for the month.

 

Fred's recently hired A.T. Kearney, a management and drug sector consulting firm, to contend with the gross margin pressures that are impacting retail pharmacy operations across the industry, Shore said. 

 

Fred's total sales for the first five months of fiscal 2015 increased 6% to $889.1 million. Excluding sales of $35.2 million from closed stores in 2014, total sales increased 10% for the first five months of 2015. On a comparable store basis, year-to-date sales increased 0.8% versus a decline of 1.3% for the year-earlier period.

 

During June, Fred's closed one Xpress pharmacy location.