The company had said it would close underperforming stores and slow capital spending and the rate of new store openings in 2008 to boost profitability.
(Reuters) - Discount store operator Fred's Inc <FRED.O> reported first-quarter results above market expectations as its restructuring efforts to improve profitability bore fruit and reiterated its full-year outlook.
The company had said it would close underperforming stores and slow capital spending and the rate of new store openings in 2008 to boost profitability.
The company, which closed 17 stores and 21 pharmacies during the first quarter, posted net income of $7.3 million, or 18 cents a share, compared with $7.4 million, or 19 cents a share, a year ago.
Total sales rose 5 percent to $464.3 million for the quarter ended May 3, while same-store sales rose 2.1 percent.
!ADVERTISEMENT!Analysts on average had expected the company to earn 16 cents a share, excluding exceptional items, on revenue of $454.4 million, according to Reuters Estimates.
For the second quarter, the Memphis, Tennessee-based company forecast earnings of 7 cents to 10 cents a share, excluding the effects of store closings. Analysts were expecting 10 cents a share, before items.
For the full year, Fred's said it still expects earnings of 52 cents to 58 cents a share. Excluding store-closing charges but including a charge of $7.5 million for minimum wage increase, Fred's expects a profit of 70 cents to 76 cents a share.
Analysts were expecting 68 cents a share, before items, for the year.
Shares of the company were trading at $11.75 before the bell. They closed at $11.48 on Wednesday on Nasdaq.
(Reporting by Swagata Gupta in Bangalore; Editing by Deepak Kannan)
