Fred’s Q4 profits down; to accelerate pharmacy expansion
Memphis -- Fred's Inc. said Thursday that its fourth-quarter net income decreased 33% amid higher operating costs and restrained consumer spending. The discounter’s forecast for this year also fell below analyst expectations.
Net income for the three months ended Feb. 2 fell to $6.6 million, compared to $9.8 million the year before.
Revenue increased 7%, to $533.4 million, also below analysts’ expectations. Same-store sales were up 4.8%.
For the year, profit was down 11% to $29.6 million. Revenue increased 4% to $1.96 billion.
On a conference call with analysts, CEO said Bruce A. Efird said Fred’s plans to aggressively accelerate its pharmacy presence. The chain plans to remodel between 15 and 20 stores each year, adding a pharmacy operation. All new store openings — between 25 and 30 each year — will include a pharmacy operation.
Currently, Fred's operates 712 discount general merchandise stores, including 21 franchised Fred's stores. Within those stores are 346 pharmacies. Fred's may open as many as 30 new pharmacies through fiscal 2013.