MEMPHIS, Tenn. Fred's reported that for the third quarter, net income increased 55% to $7.8 million or 20 cents per diluted share compared with net income of $5 million or 13 cents per diluted share in the year-earlier period.
Fred's total sales for the third quarter of fiscal 2010 increased 3% to $435 million from $422.4 million for the same period last year. Comparable-store sales for the quarter increased 1.5% compared with an increase of 1% in the third quarter last year.
Commenting on the results, Bruce Efird, CEO, said, "We are pleased to announce improved company performance for the third quarter of 2010, highlighted by a 55% increase in net income for the period. These higher earnings reflect the ongoing changes we have implemented to drive customer traffic and margin expansion, with an emphasis on our Core 5 program, an upgraded merchandise assortment, and enhancements to the look of the stores – all designed to build market share. Fred's major initiative to remodel and upgrade 200 stores in 2010 remains on track, with 190 stores completed through October.
"Although high unemployment and a very competitive sales environment continue across our markets, we enter the fourth quarter optimistic about our earnings estimates for the quarter," Efird continued. "With solid merchandising and marketing plans in place, we are well prepared to deliver great values and exciting shopping experiences for our customers. Beyond this sound merchandising platform, we also have maintained a strong financial position, with our balance sheet highlighted by a strong cash position, quality inventory and no outstanding debt under our seasonal revolving credit facility. This financial strength continues to support our 2010 initiatives and provides the resources to pursue longer-term strategies."
In the fourth quarter of 2010, the company expects total sales to increase 3% to 4%. Comparable-store sales are expected to increase 2% to 4% versus a decrease of 0.9% in the fourth quarter last year. Earnings per diluted share are forecasted to increase 33% to 60% to a range of 20 cents to 24 cents for the fourth quarter compared with earnings per share of 15 cents in the same period last year.