Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Recently, Fred's Inc.’s (FRED - Analyst Report) reported total sales and comparable sales for November 2012. Both total sales and comparable sales declined from the prior-year level.

Total sales for November 2012 dipped 1% from the prior-year quarter to $150.4 million. Top line was significantly impacted by the recent shift in the pharmacy sales from branded drugs toward generic ones.

Comparable store sales for the month also dropped 3.6%, in contrast to a growth of 1.5% in the prior-year quarter. The decline in comparable store sales in November 2012 resulted from strong competitions from the peer companies. Comparable store sales were impacted by intensive brand building by its competitors surrounding Thanksgiving and Black Friday.

The company expects stronger sales in the upcoming months owing to increased marketing efforts.  As per the guidance provided at the third quarter conference call, Fred’s expects fourth quarter total sales, including one extra week, to increase in the range of 9% to 11%. Comparable store sales, including one extra week, are expected to increase 6% to 8% in the fourth quarter of 2012.

We are encouraged with Fred’s focus on high margin products, its initiative of revamping its stores and upgrading stocks to attract more traffic.  All these bode well for long-term growth, despite the short-term headwinds. However, a tough retail environment and declining comparable store sales over the past several months remain a concern.

We currently have a long-term Neutral recommendation on Fred’s. The stock carries a Zacks #3 Rank (a short-term Hold rating). Its peers, Dollar General Corporation (DG - Analyst Report) and Wal-Mart Stores Inc. (WMT - Analyst Report), both carry a Zacks #3 Rank (short-term Hold rating).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 34.02 +10.56%
CHINA DISTAN DL 15.00 +5.78%
E HOUSECHINA EJ 10.59 +5.27%
INTERNATIONA ICAGY 33.25 +5.22%
CANADIAN SOL CSIQ 26.40 +4.88%