Fred’s income even on wider sales   

Memphis, Tenn. – While growing its first-quarter sales by 5% to $464.3 million, neighborhood general merchandiser Fred’s Inc. fought to keep profits roughly flat at $7.3 million, down from $7.4 million for the year-ago period.

Comp-store sales rose 2.1%.

While gross profit was up 4% to $132.5 million, gross margin was off 20 basis points to 28.5% of sales, as the company said “pricing pressure, a mix shift of general merchandise products and higher inbound freight costs” were to blame. At the same time, SG&A costs were trimmed by 20 basis points.

Michael Hayes, ceo, said Fred’s adherence to its strategic plan “has resulted in higher comparable-store sales this year vs. the year-earlier quarter, despite an arguably more challenging economic environment, and has driven per-share earnings to the top end of our forecasted range.”

Hayes emphasized, “A key to our first-quarter performance was the strong 1.7% improvement in comparable customer traffic. Although we will see pressure on the gross margin over the balance of the year due to a shift in sales mix and the impact of inflation, we are pushing forward aggressively on our performance initiatives to continue driving customer traffic into our stores.”

Home & Textiles Today Staff | News & Commentary

 Home Textiles Today is the market-leading brand covering the home and textiles markets, offering a comprehensive package of print and online products. Home & Textiles Today provides industry news, product trends and introductions, exclusive industry research, consumer data, store operations solutions, trade show news and much more.

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.


HTT Cover October 2017

See the October 2017 issue of Home & Textiles Today. In this issue, we look at the Top 25 Online Retailers.  H&TT's exclusive annual ranking of the biggest online sellers of home textiles finds that while pure play etailers continue to fly, bricks & clicks are digging into omnichannel. See details!