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Fred’s announces May results, expresses optimism over new marketing program

BY Antoinette Alexander

MEMPHIS, Tenn. — Fred’s reported on Thursday that sales for the month of May were essentially flat, totaling $151.9 million.

Same-store sales for the month declined 0.4% compared with a 0.5% decrease in the same period last year.

For the first four months of fiscal 2014, total sales decreased 0.6% to $650.2 million compared with $653.8 million for the same period last year. On a comparable store basis, year-to-date sales declined 1.5% versus a 1.1% decrease for the year-earlier period.

"Although comparable store sales declined slightly in May, we were pleased to see sales strengthen in the last week of the month with the impact of the first ad in our new marketing and branding program. As we covered on our recent conference call, this new marketing and branding program is designed to increase traffic and heighten customer awareness of our category diversity in the face of competition,” stated Bruce Efird, CEO. “The initial results were encouraging, and we think this new program will be effective in driving traffic and sales growth as we work toward full implementation of the marketing program by mid-July. Together with the updating of our store layout to emphasize the convenience advantages of our 15,000-square-foot store, it will better position Fred’s to serve more of the need-based categories and provide customers with faster and easier shopping experiences."

 

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SoBe teams with pro surfer to ‘Go Flavorfully’

BY Ryan Chavis

PURCHASE, N.Y. — SoBe, a brand from PepsiCo, is launching a new campaign to help revitalize its image. As part of the "Go Flavorfully" campaign, SoBe will welcome professional surfer Sebastian "Seabass" Zietz as a brand ambassador — enhancing the brand’s mission to turn every day into a moment of play.

"We are very excited to launch ‘Go Flavorfully’ and to re-establish the open-minded and bold SoBe roots in surfing by partnering with Seabass," said Linda Lagos, director of marketing, SoBe. "Seabass possesses a unique combination of talent and charisma that is not only a natural extension of this campaign, but also reflective of the brand’s proud heritage in surfing."

SoBe has long supported amateur surfers through its sponsorship of the Eastern Surfing Association and later expanded into pro surf tours. Zietz has snagged both a Vans Triple Crown and Reef Hawaiian Pro title.

"My life revolves around surfing, having fun and doing what I love," Zietz said. "I am honored to be able to share that lifestyle through SoBe and the ‘Go Flavorfully’ campaign."

To help promote the "Go Flavorfully" initiative, SoBe will bring back a fleet of customized buses, which will make stops in Denver, Phoenix and Southern California, giving consumers the chance to sample SoBe products.

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Rite Aid sees rise in May same-store sales, updates 2015 fiscal year outlook

BY Antoinette Alexander

CAMP HILL, Pa. — Rite Aid announced on Thursday a 3.5% boost in same-store sales for May, provided preliminary estimated financial results for the quarter ended May 31 and updated its outlook for 2015 fiscal year.

For the five weeks ended May 31, same-store sales increased 3.5% over the prior-year period. May front-end same store sales increased 0.5%. Pharmacy same-store sales, which included an approximate 156 basis points negative impact from new generic introductions, increased 5.0%. Prescription count at comparable stores increased 3.2% over the prior-year period.

Total drug store sales for the five-week period increased 2.5% to $2.48 billion compared with $2.42 billion for the same period last year. Prescription sales accounted for 68.0% of drug store sales, and third party prescription sales represented 97.4% of pharmacy sales.

Same-store sales for the 13-week period ended May 31 increased 3.1% over the prior-year period. Front-end same-store sales were flat compared with the prior-year period while pharmacy same-store sales increased 4.6%. Prescription count at comparable stores increased 2.3% over the prior-year period.

Total drug store sales for the 13 weeks ended May 31 increased 2.6% with sales of $6.43 billion compared with $6.26 billion for the same period last year. Prescription sales represented 68.4% of total drug store sales, and third party prescription sales represented 97.4% of pharmacy sales.

Although results for the quarter ended May 31 will not be released until June 19, the company expects adjusted EBITDA for the quarter to be between $275 million and $285 million, net income to be between $35 million and $45 million and income per diluted share to be 4 cents. Based on pharmacy margin trends, particularly in May, the company expects its results for adjusted EBITDA to trail the results for the previous year’s first quarter due primarily to higher-than-expected drug costs resulting from a delay in realizing the level of expected generic purchase price reductions and a greater-than-expected reduction in reimbursement rates.

Based on the expected results for the quarter ended May 31 and the generic purchase price reductions that are expected for the remainder of the year, the company is updating its fiscal 2015 guidance for adjusted EBITDA, net income and income per diluted share. Adjusted EBITDA is expected to be between $1.28 billion and $1.35 billion. Net income for fiscal 2015 is expected to be between $298 million and $408 million or income per diluted share of 30 cents to 40 cents. In April, it had forecast earnings of $313 million to $423 million, or 31 cents to 42 cents per share. The company’s guidance for sales, same-store sales increases and capital expenditures remain unchanged.

 

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