Fred’s Q1 earnings ‘above guidance’ despite net income loss
MEMPHIS, Tenn. Despite posting a 4.2% loss in its net income for the quarter, Fred’s was optimistic about the future.
Although the retailer’s first-quarter net income dropped to $8.2 million from $8.6 million, earnings per diluted were flat at 21 cents. Fred’s total sales for the first quarter of fiscal 2010 increased 3% to $471.6 million, compared with $458.4 million for the same period last year. Comparable-store sales for the quarter increased 2.2% on top of a 2.8% increase in the first quarter last year. Additionally, Fred’s gross profit for the first quarter of 2010 increased 6% to $136.9 million from $129 million in the prior-year period.
Commenting on the results, Bruce Efird, CEO, said, “We are pleased to report earnings above guidance in the first quarter driven by better-than-expected comparable-store sales growth and a favorable sales mix, which together resulted in a 90-basis-point improvement in gross margins.”
Efird also added that Fred’s is looking to invest in prototype stores, as well as increasing marketing of five departments and implementing a new merchandising layout in 200 locations. For its pharmacy business, Fred’s CEO is confident it will become more lucrative.
“With the passage of the new healthcare bill, we see both opportunities and challenges, and remain committed to growing our pharmacy business – both organically and through acquisitions,” Efird said. “The team is confident that these efforts will translate into improved financial performance throughout the year and provide the catalyst for achieving Fred’s 2010 earnings goals.”
Tide looking to open dry-cleaners franchises in Ohio, Atlanta markets
CINCINNATI Procter & Gamble’s detergent brand is looking to open franchised dry-cleaning locations for consumers in the Columbus, Ohio, and Atlanta markets.
Agile Pursuits Franchising, a P&G subsidiary, is looking to open Tide Dry Cleaners for the two cities, which would employ 15 to 20 people per location. Tide Dry Cleaners began in 2008, with a pilot of three dry cleaner stores in Kansas City.
P&G’s Agile Pursuits Franchising entered the car wash business in 2007 with P&G’s Mr. Clean brand, and now is the largest full-service U.S. car wash franchise, with 16 locations in Ohio, Georgia and Texas; another seven facilities are under development.
“Entering the franchise and service market is a model we find very attractive, as shown by the Mr. Clean Car Wash operations,” said Jeff Wampler, general manager for Tide Dry Cleaners. “Expanding our interests into the services industry helps us to reach more consumers’ lives with outstanding service we know consumers are looking for and need.”
FDA approves Pompe disease treatment
SILVER SPRING, Md. The Food and Drug Administration has approved a new treatment for a rare genetic disorder that causes muscle weakness, the agency said Tuesday.
The FDA approved Cambridge, Mass.-based Genzyme’s Lumizyme (alglucosidase alfa) for patients aged 8 and older with late-onset Pompe disease, which occurs in 1-in-40,000 to 300,000 births. Pompe disease causes heart and skeletal muscle weakness, leading to respiratory weakness and death from respiratory failure.
The disease results from the body’s genetic inability to make the enzyme alpha-glucosidase, also known as GAA, which is required for proper muscle functioning. The enzyme is needed to convert the sugar glycogen into energy; without the enzyme, glycogen builds up in the muscle cells, leading to weakness.
The drug is believed to work by replacing deficient GAA and reducing accumulated glycogen in the cells. Currently, the only other treatment available for Pompe disease is Myozyme (alglucosidase alfa), also made by Genzyme. Myozyme has lately been in short supply due to limited manufacturing capacity at Genzyme’s plants in Framingham and Allston Landing, Mass.
“Pompe disease is a devastating condition without the appropriate treatment,” said Julie Beitz, FDA Center for Drug Evaluation and Research Office of Drug Evaluation III director. “The approval of Lumizyme will provide an important treatment for patients diagnosed later in life with Pompe disease.”
The drug is being approved with a risk evaluation and mitigation strategy, or REMS, and will only be available through a restricted distribution system to ensure its use by the correct patient group. The drug will carry a boxed warning to alert patients and physicians to the risk of severe allergic and immune system reactions.