FRED Sales Gains In February Bodes Well For H2 FY11
Analyst Nick Mitchell of Northcoast Research maintains his "neutral" rating on Fred's Inc (NASDAQ: FRED).
FRED reported a 2.0% rise in February’s comparable store-sales, as compared to the consensus expectations of a 0.3% decline. Fred's total sales increased 3.0%, primarily driven by same-store sales increases and year-over-year growth in the number of pharmacies. FRED indicated that strong performance of its advertising circulars drove its sales during the month.
“We do not think any of the turnaround in the sales performance was tied to the next phase of the restructuring strategy that management laid out on its February 3, 2010 conference call. Respectable sales gains today bode well for 2H FY11 when the company will cycle against easier compares and receive a benefit from its merchandising and advertising initiatives,” Northcoast Research says.
