Memphis, Tenn. Fred's reported its fourth-quarter net income totaled $5.7 million, an increase from $2.3 million in the same quarter last year, including charges totaling $5.5 million related to various legal settlements and store closings in 2008.
For the year ended Jan. 30, net income increased to $23.5 million from net income of $16.6 million.
Fred's total sales for the fourth quarter of fiscal 2009 increased 1% to $473.1 million, from $469.4 million for the same period last year. Same-store sales for the quarter declined 0.9%, compared with a 1.1% decrease in the fourth quarter last year.
For the year, total sales declined 1% to $1.79 billion, from $1.80 billion in the year-earlier period. Same-store sales for the year increased 0.4% versus a 1.8% increase in the prior-year period.
"Although earnings for 2009 were not as strong as we expected, the year was a transitional one as we took many steps to make Fred's a stronger company and better positioned for 2010 and beyond,” said CEO Bruce A. Efird. “We have refined our pilot store with extensive research and validated programs to highlight the key differentiating advantages of shopping at Fred's. With the new pilot store layout, merchandising initiatives, and marketing programs in place, Fred's is better positioned to improve its performance this year and drive higher earnings in the future."
Operating income for fourth quarter 2009 increased to $8.8 million or 1.8% of sales, from $3.1 million or 0.7% of sales in the prior-year period. For 2009, operating income increased to $38.3 million or 2.1% of sales from $26.3 million or 1.5% of sales in 2008.
Fred's opened six new stores and closed nine stores during 2009. Additionally, the company opened nine express pharmacy locations and 17 additional pharmacies, while closing three pharmacies.