Fred’s grows Q1 sales by 2.1%, but targeting almost 20% growth for Q2
MEMPHIS, Tenn. – Fred's Super Dollar pulled in $509 million in first-quarter sales for the period ended May 2, the discount pharmacy operator reported Thursday, representing growth of 2.1%.
However, Fred's sales for the prior-year quarter included sales of $21.8 million from stores closed mainly in late 2014 pursuant to the company's reconfiguration plan. Excluding sales from closed locations in the prior year quarter, total sales increased 7% for the first quarter of fiscal 2015.
Comparable store sales for the quarter increased 0.8% compared with a decrease of 1.9% in the first quarter last year.
"Our earnings for the first quarter of fiscal 2015 were at the low end of the guidance we expressed in our year-end conference call in March, and we continued to see further strengthening in EBITDA, which for the first quarter was at the high end of guidance," stated Fred's CEO Jerry Shore. "We believe this trend in EBITDA demonstrates the meaningful change now underway at our company as we continue to focus on an updated, convenient and pharmacycentric Fred's."
With the recent acquisition of retail pharmacy Reeves-Sain and specialty pharmacy EntrustRx, the pharmacy buisness remains a central focus for Fred's, Shore said.
"This acquisition contributed to our top line growth in the pharmacy department for the first quarter, but we and the industry continue to experience slow reimbursements, reimbursement rate reductions associated with preferred Medicare Part D networks and inflation in generic drugs," he said. "Elsewhere in our stores, we have seen ongoing process improvements in our general merchandise departments, marketing, supply chain functionality and store operations, and, importantly, cross functional teamwork continues to build throughout our organization."
During the first quarter, Fred's opened three Xpress pharmacy locations and closed one full-service store. Fred's also acquired two specialty pharmacy locations.
For the second quarter of 2015, Fred's projects total sales to increase between 16% and 19% with comparable store sales growth ranging between 1% and 3%.