Fred's January Comparable Store Sales Down 0.8%; Sees Quarterly EPS at Low End to Midpoint of Previous Guidance of $0.23 to $0.27

Fred's Inc.

today reported sales for the four-week fiscal month, fourth quarter and year ended January 28, 2012. Fred's total sales for the month increased 3% to $132.4 million from $129.1 million in January 2011. Comparable store sales for the month declined 0.8% compared with an increase of 2.1% in the same period last year. Total sales for the fourth quarter of 2011 increased 2% to $497.7 million compared with $485.6 million in the same period last year. On a comparable store basis, fourth quarter sales increased 0.1% on top of an increase of 2.3% in the same period last year. Fred's total sales for fiscal 2011 increased 2% to $1.879 billion compared with $1.842 billion for fiscal 2010. On a comparable store basis, fiscal 2011 sales rose 0.5% versus an increase of 2.2% for the prior year. Commenting on the announcement, Bruce A. Efird, Chief Executive Officer, said, "We were pleased to see strong customer traffic in January, together with increasing pharmacy script counts. We also witnessed a continued solid performance in Pet and Household Supplies, two of our Core 5 departments. As in December, January sales were affected by unseasonably warm weather across our markets and the shifting of a month-end advertising circular. Although sales growth for the quarter fell short of our outlook, we still anticipate that earnings for the fourth quarter will be at the low end to midpoint of our projected range of $0.23 to $.027 per diluted share, reflecting an offsetting benefit from ongoing control of expenses.