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Recently, Fred's Inc. (FRED - Analyst Report) reported total sales and comparable sales for January 2012, both of which increased from the comparable period in the prior year.

Comparable store sales for the month climbed 28.6% including the extra week in 2013. Excluding the effect of the extra week, same store sales were flat in January compared to a decrease of 0.8% in the year-ago period. The improving results were attributed to initiatives in tobacco and to drive higher ticker amounts, which were helped by pharmacy script growth.

Total sales for Jan 2013 climbed 31% from the prior year to $173.6 million. Excluding the extra week, total sales climbed 2% in Jan 2013. Successful completion of the company’s layaway sales program and script improvement in the pharmacy department drove the sales improvement.

The company opened two new stores and closed one store and an Xpress pharmacy during the month.

Fourth Quarter Sales

Total sales for the fourth quarter increased 7% to $533.5 million versus $497.7 million for the year-ago quarter; while comparable store sales increased 4.8%. Excluding the effect of the extra week, fourth quarter comparable store sales decreased 2.8% compared with an increase of 0.1% in the prior-year period.

However, with consumers regaining confidence, Jan 2013 was strong for most retailers, including Gap Inc. (GPS - Analyst Report), Ross Stores Inc. (ROST - Analyst Report) and Costco Wholesale Corporation (COST - Analyst Report) which registered comps growth of 8%, 4% and 4%, respectively.

A tough retail environment and declining comparable store sales over the past several months remain a concern. Currently, Fred’s carries Zacks Rank #4 (Sell).

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