Fred’s not happy for holiday
Home & Textiles Today Staff -- Home Textiles Today, November 21, 2006
Memphis, Tenn. – Fred’s Stores stumbled in the third quarter — its earnings fell by 6% to $6 million, or 15 cents per share vs. $6.3 million, or 16 cents per share, during the year-ago period.
The culprit: October. Following several months of steady sales and comp gains, lower-than-expected October growth arrived against comparisons to a period last year when aid to the hurricane-stricken Southeast help propel Fred’s results. Although third-quarter sales rose 8% to $407.9 million, they missed Wall Street’s target by $6 million. Comps rose 3%.
Fred’s cash-strapped customer – whose average transaction during the quarter rang up at $18.04 – is not expected to be in good shape going into the holiday season, ceo Michael Hayes told analysts during a conference call this morning.
However, should the incoming Congress pass a minimum wage increase next year, Fred’s should see some benefit from it – despite the short-term impact on its own payroll, executives said. “Our 2007 projection will probably be more positive than some might expect,” Hayes said.