Memphis, Tenn. -- Fred's Inc.’s fiscal second-quarter net income fell to $3.3 million from $6.1 million because of a hefty tax benefit a year ago. The company’s adjusted results showed improved profitability, helped by increased customer traffic, higher traffic and lower costs.
The retailer cautioned, however, that its lower-income customers are still feeling economically pressured. Fred's said that it anticipates the operation environment will be challenging in the second half of the year.
“Discretionary spending for lower-income consumers — a key customer segment for Fred's — is expected to remain under pressure,” CEO Bruce Efird said.
Revenue for the quarter ended Aug. 3 rose 2% to $482.2 million, from $470.8 million. Same-store sales increased 2.2%.