Fred's Reports Higher Sales in Apr - Analyst Blog
09 5월 2013 - 3:20AM
Zacks
Recently, Fred's Inc. (FRED) reported total
sales and comparable sales for Apr 2013 that were higher than the
year-ago period. Comparable store sales for the month climbed 1.2%
compared with a decline of 0.3% in the year-ago month. Strong
performance of the general merchandise and higher customer traffic
led to the rise in same store sales during the month. Total sales
for Apr 2013 increased 3% to $152.2 million compared with $147.6
million a year ago.
Although sales were partly hampered due to poor weather conditions
and negative impact of the ongoing shift from branded to generic
drugs, strong sales from the higher margin products following the
company’ s investment in redesigning its assortments led to sales
growth.
For the first three months of fiscal 2013, comparable store sales
declined 1.3% compared to 0.4% decline in the same month a year
ago. Fred’s’ total sales inched up to $501.4 million compared with
$500.5 million for the same period last year.
Guidance
Fred’s asserted that it is well on track to achieve its growth
targets in the first quarter of fiscal 2013. While announcing its
March sales, the company has revealed that it expects tough retail
conditions to continue across the markets in fiscal 2013.
Comparable store sales, including one extra week, are expected to
decrease by 1% to 3% in the first quarter due to weak sales in
March. The company expects to record earnings within the range of
26 cents–30 cents per share in the quarter.
For fiscal 2013, Fred’s expects earnings to drop 77 cents–88 cents
per share compared with fiscal 2012. However, excluding the impact
of favorable income tax adjustment of 12 cents per share on 2012
results, earnings per share is expected to increase 12% to 28% in
the year. The Zacks Consensus Estimate is pegged at 29 cents per
share for the first quarter and 82 cents for fiscal 2013.
We, however, are not optimistic about the outlook provided by
Fred’s. A tough retail environment and declining comparable store
sales over the past several months remain a concern. Currently,
Fred’s carries a Zacks Rank #5 (Strong Sell).
If you are looking for a diversified retailer, it might not be a
bad idea to check out The TJX Company (TJX),
Costco Corporation (COST) and Gap
Inc. (GPS). All of them carry a Zacks Rank #2 (Buy).
COSTCO WHOLE CP (COST): Free Stock Analysis Report
FREDS INC (FRED): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis Report
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