Fred’s Earnings: Everything You Must Know Now

Fred’s Inc. (NASDAQ:FRED) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

Fred’s Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 47.06% to $0.09 in the quarter versus EPS of $0.17 in the year-earlier quarter.

Revenue: Rose 2.42% to $482.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Fred’s Inc. reported adjusted EPS income of $0.09 per share. By that measure, the company met the mean analyst estimate of $0.09. It missed the average revenue estimate of $482.45 million.

Quoting Management: Bruce A. Efird, Chief Executive Officer, said, “We are pleased by the Company’s performance during the second quarter, which was highlighted by a strong increase in both operating income and net income, excluding last year’s tax benefits. Sales growth, customer traffic, average ticket, gross margin, and expense management were all positive factors in the quarter. We also were pleased with the progress of the first phase of our reconfiguration plan as the penetration of stores with pharmacies increased from 50% to 52% and we experienced strong comparable sales performance in our expanded Hometown Auto & Hardware departments.

Key Stats (on next page)…

Revenue decreased 3.85% from $501.5 million in the previous quarter. EPS decreased 70.97% from $0.31 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.23 and has not changed. For the current year, the average estimate has moved up from a profit of $0.83 to a profit of $0.85 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)