July same-store sales at Fred’s declined 0.5% and that’s not a particularly good sign for Walmart, as the company prepares to release its quarterly results on Aug. 16. Fred’s appeals to lower income shoppers at its 672 stores in the Southeastern U.S. where the company has considerable overlap with Walmart.
“July’s sales performance was consistent with the first two months of the quarter as external economic factors, including high unemployment and reductions in government aid, continued to have a negative impact throughout the Southeast,” said Fred’s CEO Bruce Efird. “Even though several of our core five focus areas performed well, including pet and household supplies, the overall pressures of the economy continued to drive sales toward basic and consumable products. In spite of lower than expected sales and inflation driven margin pressure, we now expect net income per diluted share for the second quarter to be flat compared with the same period last year.”
For the second quarter, Fred’s said its same-store sales declined 0.4%.