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Fred’s grows Q1 sales by 2.1%, but targeting almost 20% growth for Q2

BY Michael Johnsen

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%. 
 
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Costco sees slight lift in Q3 sales, net income

BY Antoinette Alexander

ISSAQUAH, Wash. — Costco experienced a slight lift in sales during the third quarter as total comparable sales slipped 1%.

For the 12 weeks ended May 10, net sales increased 1%, to $25.52 billion, from $25.23 billion last year. Total same-store sales declined 1% as U.S. comparable sales inched up 1%.

Net income for the quarter was $516 million, or $1.17 per diluted share, compared with $473 million, or $1.07 per diluted share, last year.

Costco currently operates 673 warehouses, including 474 in the United States and Puerto Rico, 89 in Canada, 35 in Mexico, 26 in the United Kingdom, 20 in Japan, 11 in Korea, 10 in Taiwan, seven in Australia and one in Spain. The company plans to open up to an additional 15 new warehouses (including one relocation) prior to the end of its fiscal year on Aug. 30.
 

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Dollar General taps COO Todd Vasos as new chief executive

BY Marianne Wilson

GOODLETTSVILLE, Tenn. — Dollar General on Thursday named Todd J. Vasos, COO, to the position of chief executive, effective June 3. He has also been elected to the board.
 
Vasos will succeed Rick Dreiling, chairman and CEO, who had previously announced his retirement plans. Dreiling will remain on the board for the remainder of his term and will serve as senior advisor and chairman of the board through January 29, 2016.
 
The election of Vasos to Dollar General’s board will bring the total number of directors to nine.
 
“Todd (Vasos) is a proven leader and the right person to guide Dollar General as it enters this next chapter in the company’s history. With Todd’s appointment as CEO and Rick’s continued service, we ensure the continuation of both the leadership and strategy that have made Dollar General a retail powerhouse,” said Mike Calbert, lead director, Dollar General, which operates 11,999 stores in 43 states.
 
Vasos joined Dollar General in December 2008 as executive VP, division president and chief merchandising officer. He was promoted to COO in November 2013.
 
Prior to joining Dollar General, Vasos served in executive positions with Longs Drug Stores Corporation for seven years. He also previously served in leadership positions at Phar-Mor Food and Drug Inc. and Eckerd Corporation.
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