Fred's June Comparable Sales Drop 1.3%

Fred's Inc. FRED disclosed that its comparable store sales for June witnessed a downtick of 1.3 percent compared to an uptick of 1.6 percent in the previous year month. Its total sales also fell 2.3 percent to $213.3 million in June.

For the year-to-date period, comparable store sales advanced 0.1 percent compared to an increase of 0.8 percent in the same period last year. Its total sales for the first five-month period grew 3.8 percent to $923.2 million from $889.5 million in the same period last year.

The company's CEO, Jerry Shore, commented, "Although sales for the month were lower than plan, we were encouraged with the front store performance in June. Sales growth in core categories such as health and beauty aids, seasonal, apparel, toys, lawn and garden and electronics helped offset ongoing challenges in paper, chemicals and food that we have discussed on earlier occasions. Consequently, front store comparable sales were positive and increased sequentially from May 2016."

He continued, "Looking ahead, we remain confident in the direction of our business and the success of our initiatives to drive future growth and profitability. We continue to see overall front store margin improvement as we expand our assortments in high-margin categories and have plans in place to turn around weaker categories beginning in the third quarter. We expect the retail pharmacy department will remain resilient as our labor management program continues to have a positive impact on our cost to fill. Additionally, the pressured Hepatitis C segment should benefit from new Hepatitis C drugs being introduced in July as well as longer-term company strategies to expand additional therapies."

The stock closed Wednesday's trading at $16.05.