Fred’s 1Q Profit Falls on Higher Taxes
Memphis, Tenn. Fred’s Inc. said Thursday its first-quarter profit fell 3% as higher sales were offset by growing costs and rising taxes.
For the quarter ended May 3, Fred’s earned just under $7.3 million compared with profit of about $7.4 million during the same period a year prior. Sales rose 5% to $464.3 million from $442.3 million.
Same-store sales rose 2.1% during the quarter and would have risen 2.5%, excluding stores that have been closed or will be closed, the company said.
In February, Fred’s said it will close 75 underperforming stores in an effort to improve its profit.
“Although we will see pressure on the gross margin over the balance of the year due to a shift in sales mix and the impact of inflation, we are pushing forward aggressively on our performance initiatives to continue driving customer traffic into our stores,” said CEO Michael J. Hayes in a statement.
Costco 3Q sales up 13%
ISSAQUAH, Wash. Costco Wholesale reported that net sales for the third quarter of fiscal 2008 increased 13% to $16.26 billion, from $14.34 billion during the third quarter of fiscal 2007.
The company reported that U.S. comparable-store sales for the quarter increased 6%. This increase reflects the recent rise in gas prices. Excluding this, Costco said U.S. comps would have increased 4%.
Net income for the third quarter of fiscal 2008 was $295.1 million, or 67 cents per diluted share, compared to $224 million, or 49 cents per diluted share, during the third quarter of fiscal 2007.
Sears Holdings posts 1Q loss
HOFFMAN ESTATES, Ill. Sears Holdings reported a net loss of $56 million, or 43 cents loss per diluted share, for the first quarter ended May 3, compared with net income of $223 million, or $1.45 per diluted share, for the first quarter ended May 5, 2007.
For the quarter, Sears Domestic’s comparable-store sales declined 9.8% while Kmart’s comparable-store sales declined 7.1%. Total domestic comparable-store sales declined 8.6%. Sears contributed the comps decline to increased competition and weakness in the general economy and housing market, as well as the impact on its customers of the increased costs of consumer staples such as food and gas.
“Our first quarter results reflect the difficult economic environment and intense competition for consumer business. That said, since May 3, 2008, our sales declines have moderated somewhat,” said Bruce Johnson, Sears Holdings’ interim ceo and president. “As a result of actions we have taken and will continue to take to manage our costs, our current forecast for 2008 reflects higher EBITDA than we achieved last year. At the same time we are managing costs, we will continue to invest in our future by hiring talented leaders and improving our online and multi-channel capabilities.”