Fred's Inc reported record sales for the five-week fiscal month of June, which ended July 7, 2007, versus the five-week period last year that ended July 1, 2006.
Fred's total sales for June rose 4% to $166.2 million from $160.2 million in the same month last year. Comparable store sales for the month increased 1.5% versus an increase of 2.6% in June 2006.
Total sales for the first five months of fiscal 2007 increased to $740.8 million, up 5% from $704.5 million in the year-earlier period. On a comparable store basis, year-to-date sales increased 1.5% versus the same period last year, when Fred's posted a 2.4% gain in comparable store sales.
Commenting on the announcement, Michael J. Hayes, Chief Executive Officer, said, "Even though we ended our fiscal month with strong sales over the Fourth of July holiday period, overall sales results for June were below our expectations, with most of the weakness occurring in the last week of the calendar month.
As we discovered in May, a major aspect of the slowdown in our comparable sales performance relates to the continuing shift to and introduction of generic drugs, which carry much lower retail prices. While this has a negative impact on our pharmacy and company comparable sales, it has a neutral-to-positive effect on our bottom line because of the increased margin on generics.
Also, our apparel departments continued to under-perform against prior-year comparable sales because of our decision to exit boys and girls clothing and implement our merchandise refresher program. We remain excited about the continuing progress and results of our refresher program, which has now been implemented in more than 230 of our stores. Although we faced a roller-coaster sales performance in June, the Company's execution matched our financial budgets and we remain on target to achieve our financial goals for the quarter."
marketing@alchempro.com
