MEMPHIS, Tenn. — Fred's Super Dollar on Thursday reported sales gains for the four weeks ended Nov. 2, reaching $143.4 million on 2% growth. Comparable store sales for the month increased 0.8% versus a decline of 0.8% in the same period last year.
"Sales for October were at the lower end of our guidance as general merchandise sales were sluggish and consumable driven," commented Bruce Efird, Fred's CEO. "Poor weather around Halloween hurt sales and consumers tightened spending during the recent budget crisis, with the combination affecting sales and gross margins in the back half of the month," he suggested. "On the positive side, we experienced strong pharmacy sales and a solid performance from our reconfigured departments, especially Hometown Auto & Hardware." Efird noted that reported sales also were reduced by higher comparable layaway sales, which are not recognized for accounting purposes.
Total sales for the third quarter of 2013 were $460.5 million, up 2%. And comparable store sales for the quarter increased 1.4% compared with a decline of 2.5% in the third quarter of 2012.
Fred's is now expecting third quarter earnings to be up 5% to 10% over last year. "Forecasts for the upcoming holiday season project a very tough retail environment," Efird said. "In anticipation of these challenges, Fred's merchandising team has maintained inventories at or below last year's levels and has initiated an aggressive and targeted marketing program for the fourth quarter."
During the month, Fred's opened two stores with relocated pharmacies and closed one Xpress pharmacy locations.