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Fred’s first-quarter income jumps 9%, eyes pharmacy growth in ‘aggressive’ 2013 plan

BY Jason Owen

 MEMPHIS, Tenn. — Fred’s Inc. reported positive financial results for the first quarter on Thursday and is looking to implement initiatives to reconfigure its pharmacy department and expand its specialty drug program as key drivers in its "aggressive" 2013 plan.

For the first quarter ended May 4, 2013, Fred’s net income increased 9.1% to $11.4 million, compared with net income of $10.5 million in the first quarter ended April 28, 2012. Earnings per diluted share increased 10.7% to $0.31 for the first quarter from $0.28 for the same period last year.

Fred’s total sales for the first quarter of fiscal 2013 increased 0.2% to $501.5 million from $500.5 million for the same period last year. Comparable store sales for the quarter declined 1.3% versus a decrease of 0.4% for the first quarter last year.

Commenting on the results, Bruce A. Efird, CEO, said, "We are very pleased with our first-quarter results, which topped the high end of our earnings guidance for the period. These improvements reflected the immediate impact of our recently launched reconfiguration plan, as we outperformed in gross margin results and expense management. Given the unusual weather conditions that affected top-line growth during the quarter, our team’s ability to control expenses was one of the primary reasons we were at the high end of expectations.

"As we outlined in our recent year-end conference call, the team has set an aggressive plan for 2013," Efird continued. "This includes implementing the initiatives of our reconfiguration plan targeting pharmacy department growth, expanding our specialty drug program, and rolling out our expanded auto and hardware program. We also will continue to update and refine our new prototypes and launch the test of the destination stores. We are guardedly optimistic about the second quarter and expect that earnings from operations for the quarter will improve in the range of approximately 25% to 75% compared with the same period last year. The $0.12 per share tax rate benefit recorded in the second quarter last year will not be available in 2013."

Fred’s gross profit for the first quarter of 2013 increased 2.1% to $151.0 million from $147.8 million in the prior-year period. Gross margin for the quarter increased to 30.1%, compared with 29.5% in the same quarter last year. The margin improvement is primarily attributed to the pharmacy department effect of the brand to generic mix shift.

Selling, general and administrative expenses for the quarter, including depreciation and amortization, deleveraged 50 basis points to 26.6% of sales from 26.1% of sales in the prior-year quarter. The deleveraging of expenses was primarily attributable to new store and pharmacy department growth.

For the first quarter of 2013, operating income, which is equivalent to earnings before interest and taxes or EBIT, a non-GAAP measure, improved to $17.8 million or 3.5% of sales from $17.1 million or 3.4% of sales in the prior-year period.

For the first quarter of 2013, earnings before interest, taxes, depreciation and amortization or EBITDA, also a non-GAAP measure that further excludes depreciation and amortization from EBIT, was $28.1 million or 5.6% of sales, compared with $26.5 million or 5.3% of sales in the year-earlier quarter.

During the first quarter, Fred’s opened one full-service store and three Xpress pharmacy locations, which were offset by the closure of one full-service store.


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Sam’s Club offers men’s health screenings

BY Alaric DeArment

BENTONVILLE, Ark. — Sam’s Club will host free health screenings for men’s health next month, the club retailer said.

Sam’s Club said it would offer free screenings at all of its 565 stores with pharmacies on June 8 for Men’s Health Month. The screenings include screenings for prostate cancer, as well as thyroid tests for women, blood pressure tests, body mass index and vision tests.

"It is important for men to actively monitor their health and understand the unique issues they can face," Sam’s Club SVP Health and Wellness Jill Turner-Mitchael said. "Sam’s Club hosts preventive screenings to offer a free and easy way for men to receive an annual [prostate-specific antigen] test, for families to offer the gift of health for dad this Father’s Day and to help our customers understand how preventive care can save lives."

 

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Jul-07-2014 04:37 am

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L.Davidson says:
Jun-03-2013 10:28 pm

I agree of this initiatives. Monitoring men's health an important part in maintaining a productive and healthy society. - J. Kale Flagg

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Armada appoints Mike Baldzicki as EVP industry relations and advocacy

BY Alaric DeArment

FLORHAM PARK, N.J. — Armada Health Care has appointed Mike Baldzicki as its EVP industry relations and advocacy, the specialty pharmacy group purchasing and channel management company said Friday.

Baldzicki will help the company with business development and find speaking and presentation opportunities at industry events.

Baldzicki is a member of the Academy of Managed Care Pharmacy, the Specialty Pharmacy Association of America, the Pharmaceutical Care Management Association, the Immune Deficiency Foundation Committee and is listed in Strathmore’s Who’s Who for Healthcare Professionals. Baldzicki previously worked at Axelacare Health Solutions as VP strategic contracting and payer relations.


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