Fred’s sees positive numbers for Q4, full year
MEMPHIS — Net income for Fred’s jumped 49% during the fourth quarter to $8.6 million, or 22 cents per diluted share, compared with the year-ago period.
Despite the challenging retail climate and concerns that rising gas prices will take a toll on retailers’ financial well-being, Fred’s noted it will continue to forge ahead with its plans.
"These results … reflect the hard work and dedication of our team and [its] successful execution of our updated strategies — all within the context of a challenging retail climate," Fred’s president and CEO Bruce Efird said. "Through [our team’s] efforts, we made significant progress during 2010 in upgrading our stores, improving our merchandise selection and strengthening our customer service levels, which in turn helped drive increased sales and higher customer traffic."
"While we expect that tough retail conditions will continue across our markets in 2011 due to ongoing concerns about higher petroleum prices and their effects on the economy, the progress we made last year provides a solid foundation to expand market share and continue our push for higher operating margins," Efird added. "Our team is well-positioned to capitalize on these accomplishments. [Its] efforts, coupled with our new 2011 programs, will ensure a more exciting and pleasant shopping trip for our growing customer base, while continuing to drive strong financial returns."
Fred’s total sales for the fourth quarter of fiscal 2010 increased 3% to $485.6 million from $473.1 million for the same prior-year period. Comparable-store sales for the quarter increased 2.3%, compared with a decline of 0.9% for the prior fourth quarter.
On a full-year basis, Fred’s net income income increased 25% to $29.6 million, or 75 cents per diluted share, for the period ended Jan. 25, compared with the prior-year period. Fred’s total sales for 2010 increased 3% to $1.84 billion from $1.78 billion for the same period in 2009. Comparable-store sales for 2010 increased 2.2% on top of an increase of 0.4% in 2009.
During 2010, Fred’s opened 15 stores and 21 pharmacy locations, and closed seven stores and 15 pharmacy locations. The company said it also revamped 196 of its stores with its new Core 5 elements.
Looking ahead, Fred’s projected total sales for first quarter 2011 will increase in a range of 2% to 4%, while comparable-store sales are expected to rise 1% to 3%. Earnings per diluted share are forecast to increase 14% to 24% to a range of 24 cents to 26 cents for the first quarter.
Arm & Hammer celebrates Power Gel’s first birthday with online contest
PRINCETON, N.J. — Arm & Hammer’s gel laundry detergent is celebrating its first birthday and has invited parents to share messy first birthday moments for a chance to win a dream birthday party for their child.
Arm & Hammer Power Gel is sponsoring a contest where through June 15, parents can upload an unforgettable, messy moment from their child’s first birthday, along with a caption, to PowerGelParty.com.
From there, the top five finalists, as determined by Arm & Hammer, will be unveiled on the site on July 18, and consumers will be invited to vote for their favorite until July 31. The grand-prize winner will receive the “Ultimate Kid’s Birthday Party,” valued at up to $5,000, while other top four finalists will receive a one-year supply of Arm & Hammer Power Gel laundry detergent and a $250 party supply gift certificate.
Arm & Hammer also is giving all entrants the opportunity to win 1-of-500 free bottles of Arm & Hammer Power Gel laundry detergent through a random drawing.
Click here for more information about the contest.
Walgreens boosts online presence with Drugstore.com acquisition
DEERFIELD, Ill., and BELLEVUE, Wash. — Shortly after posting record second-quarter sales on Tuesday, Walgreens announced that it would "accelerate its online strategy" by acquiring e-retailer Drugstore.com for about $429 million, subject to customary conditions.
“Our acquisition of Drugstore.com significantly accelerates our online strategy to leverage the best community store network in America by becoming the most convenient choice for health and daily living needs, whether customers shop online or in our stores,” Walgreens president and CEO Greg Wasson said.
“This acquisition offers a unique opportunity that will provide us immediate access to more than 3 million savvy, online loyal customers, and will allow us to move even closer to our existing customers through relationships with new vendors and partners, adding approximately 60,000 products to our already strong online offering," Wasson added.
Under the agreement, Drugstore.com stockholders will receive $3.80 in cash for each share of stock, representing a total of about $429 million; a price about $27 million less than the online retailer’s 2010 U.S. sales, according to Online Retailer. The price per share, Walgreens noted, is a premium of about 102% over Drugstore.com’s 30-day average closing stock price, and a premium of approximately 113% over the closing price of Drugstore.com’s common stock on March 23, the last trading day prior to the announcement.
Walgreens noted that the deal is subject to customary conditions, and expects the acquisition to close by the end of June.
Earlier this month, the drug store chain announced it would sell off to Catalyst Health Solutions its pharmacy benefit management business — which carried a price tag of about $525 million in cash — to focus on core strategies.
Snapping up Drugstore.com and its assets — which include the namesake site, along with Beauty.com, SkinStore.com and VisionDirect.com — will "complement and extend many of our own multichannel initiatives that have been driving growth in our business," Wasson said. "As a result, we are positioned better than ever to be the most convenient multichannel retailer of health and daily living needs in America — offering customers what they want, when they want it and where they want it.”
Drugstore.com’s board of directors unanimously approved the definitive agreement. Dawn Lepore, Drugstore.com CEO and chairman, said that the company’s growth strategy was perfectly aligned with Walgreens’, and that she was confident that the drug store chain would achieve Drugstore.com’s vision and growth opportunities.
“We believe the acquisition of Drugstore.com by Walgreens is a great fit for all of our constituencies,” Lepore said. “Our goal consistently has been to create value for our customers, employees and shareholders. We believe we have made significant progress over the last six years and built an organization with a broad and deep bench of Internet experience. The opportunity to become a part of Walgreens is the right next step in this journey.”