FINANCE

Fred’s Q2 tops Street

BY Staff Writer

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%.

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News

Verizon: Enterprise cloud use reaches tipping point

BY Dan Berthiaume

New York – The use of cloud-based enterprise storage and production applications, as well as enterprise spending on cloud technology, has increased in the past year to a tipping point. According to the Verizon 2013 State of the Enterprise Cloud Report, between January 2012 and June 2013 the use of cloud-based storage grew 90% and use of cloud-based memory increased 100%, mostly due to the shift of business-critical applications to the cloud.

Other findings of the report include:

  • Increased cloud capacity led to a slower growth rate of virtual machines (35%) during the report period.
  • Enterprises increased their average cloud spend by 45%.
  • Rated in order of importance, the four most critical cloud components are uptime, performance, user interface, and API.
  • Sixty percent of cloud applications are web-based and Internet-facing. Another 23% are internal-facing production applications.

Of particular interest to retailers, the report predicts that enabling retail services will be one of three key factors driving future enterprise cloud growth. Verizon research indicates that online retailers are spending more on cloud services to implement Internet-facing, POS, and online purchasing applications. The other two key enterprise cloud growth drivers are increasing worker productivity and leveraging Big Data. Verizon cautions that cloud technology must deliver enterprise-grade security and consistent performance to reach its full potential as a business IT platform.

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OPERATIONS

Chick-fil -A offers free cross-channel promotion

BY Dan Berthiaume

Atlanta – Chick-fil-A is running a “Breakfast on Us” cross-channel promotion that offers a free breakfast entrée to customers who make an online reservation for any Chick-fil-A restaurant. Beginning Aug. 29, customers can visit Chick-fil-AForBreakfast.com to reserve a breakfast entree of choice, as well as a time to redeem their breakfast item at a local Chick-fil-A restaurant between Sept. 9 and Spt. 14.

“The breakfast day part continues to be a tremendous growth opportunity for Chick-fil-A,” said Steve Robinson, Chick-fil-A’s chief marketing officer. “We have steadily focused on maximizing the breakfast day part with a variety of menu enhancements and promotions over the past several years, and we hope our ‘Breakfast on Us’ promotion will encourage our current customers to try something completely different and also help attract new breakfast customers for us.”

Individual Chick-fil-A restaurants will offer a choice of up to 10 breakfast entrees. Individual consumers will only be allowed to redeem one free entrée during the six-day promotion period.

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