May sales growth gives Fred's solid start in Q2

MEMPHIS, Tenn. — May sales at Fred's Inc. increased 6% to $152.1 million from $143.6 million in May 2011. Comparable-store sales for the month rose 1.3% compared with an increase of 0.2% in the same period last year.

Fred's total sales for the first four months of fiscal 2012 increased 4% to $652.6 million compared with $628 million for the same period last year. On a comparable-store basis, year-to-date sales increased 0.1% on top of an increase of 0.8% in the same period last year.

Commenting on the announcement, Bruce Efird, CEO, said, "We are pleased to report a solid start to our second fiscal quarter, with total and comparable sales both at the high end of expectations for May. As we discussed in our recent earnings conference call, we initiated several new product programs late in the first quarter, and these initiatives have begun to contribute to higher general merchandise sales. Additionally, our pharmacy department continued its strong performance, against the broader shift of brand to generic drugs. We are confident that our initiatives in general merchandise will lead to an improvement in comparable store sales going forward. Based on this expectation, along with the improved performance of our newer stores, we remain optimistic about the momentum developing in our business for the second quarter and the remainder of the year."

During May, Fred's opened one new store.