Fred’s not happy for holiday
November 21, 2006-- Home Textiles Today,
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.
Related Content By Author
Live from New York Textiles Market: Day 3