Fred's says bad weather hurts sales, profits
Fred's says bad weather cuts into sales for January, profits for the quarter
MEMPHIS, Tenn. (AP) -- Fred's Inc. said Thursday that its sales were hurt in January by bad weather that also cut into the retailer's profit for the quarter.
The discount retailer said that the rough weather disrupted consumers' shopping habits and led to the closure of more than 120 stores during the final week of the month.
Fred's, based in Memphis, Tenn., operates 704 discount general merchandise stores in the southeastern U.S.
The company said that its revenue from stores open for at least a year fell 1.8 percent in January. That measure is a closely watched gauge that it strips away the impact of recently opened or closed stores. Analysts polled by Thomson Reuters were anticipating a 1 percent decline.
Fred's adjusted its January results to eliminate the first week of the month to make it comparable with those of the prior year.
CEO Bruce Efird said that prior to the last week of January, the company's sales were running in the middle of the company's forecast but fell sharply in that final week due to bad weather. He said that the drop in sales should reduce the company's earnings for its fourth quarter by 3 cents per share.
Fred's now expects earnings between 13 and 16 cents per share for its fourth quarter. Analysts polled by FactSet were anticipating earnings of 18 cents per share.
Despite those issues, the company's stock rose 2.4 percent to $17.40 by midday in low-volume trading, just ahead of broader market gains.
