Fred's Q3 Profit Rises; Updates Annual EPS View - Quick Facts

(RTTNews) - Discount retailer Fred's Inc. (FRED) posted higher third-quarter net income of $7.3 million or $0.20 per share, versus $6.6 million or $0.18 per share in the year-earlier period. On average, 9 analysts polled by Thomson Reuters expected earnings per share of $0.20 for the quarter. Analysts' estimates typically exclude one-time items.

For the quarter, Fred's total sales rose 2.2% year-over-year to $460.5 million, from $450.6 million; and comparable-store sales increased 1.4%, compared with a 2.5% decline last year. Eight analysts estimated revenues of $459.97 million for the quarter.

Commenting on the results, Chief Executive said, "We are pleased to report an 11% increase in earnings for the third quarter, which reflected the ongoing progress we have seen with our key initiatives for the year. Our Hometown Auto & Hardware department continues to produce strong comparable store sales and the investments in pharmacy growth have been validated by the 8% increase in its total department sales. Notably, our pharmacy department accounted for more than 40% of total company sales during the quarter."

Looking ahead to the fourth quarter of 2013, the firm expects total sales to increase in the range of 1% - 3%, and comparable-store sales to be in the range of flat to up 2%. Fourth-quarter earnings per share are forecasted to be in the range of $0.18 - $0.23, while 10 analysts project earnings of $0.20 per share.

For 2013, the company now sees total earnings per share to be in the range of $0.78 - $0.83. Street currently is looking for full-year earnings of $0.80 per share. Fred's said in a statement, "For the full year, we project earnings to increase from 13% to 20% over 2012, excluding the one-time tax benefit recorded last year."