Fred's: Merry Go Round
Darspal S Mann
Darspal S Mann
Mon, Oct. 17, 1:02 PM
- Investors appear to be a little edgy about the chain store sector with the earnings season just starting to ramp up.
- Dillard's (DDS -4.3%) and Bon-Ton Stores (BONT -5%) are down significantly, while Kohl's (KSS -1.3%), Big Lots (BIG -0.7%), Fred's (FRED -1.6%), Target (TGT -1.2%), Five Below (FIVE -2.6%), Pier 1 Imports (PIR -5.3%), and Barnes & Noble Education (BNED -2.4%) are all tracking below broad market averages.
- There isn't a lot of consensus about what's been holding back U.S. consumers. Today, higher gas prices is being floated around as a factor, while last week it was election anxiety.
- 12-month chart of gas prices in the U.S. via GasBuddy.
- Previously: Retail sales track higher as expected (Oct. 14)
- Previously: Winners and losers from the retail sales report (Oct. 14)
- ETFs: XLY, XRT, VCR, RTH, RETL, FXD, FDIS, RCD, PMR, CNDF, FTXD, JHMC.
Sat, Oct. 8, 9:09 AM
- Retailers want the U.S. election over and quick. The negative tone has created a degree of uncertainty with consumers that has impacted spending and traffic patterns, according to a host of top execs.
- "There is just great uncertainty as to what is going to happen in the U.S. in particular as a result of the outcome of the election," noted Yum Brands (NYSE:YUM) CEO Greg Creed recently. "People may be hunkering down a little bit," he added.
- Expect the topic to be raised on a large number of Q3 earnings calls over the next month to explain away revenue misses.
- It's not an excuse that everyone is buying into. Retail Metrics president Ken Perkins doubts that daily shopping needs are cut short by election fascination and notes consumer confidence is measuring high. Then there's Amazon (NASDAQ:AMZN) which seems to be rolling right along without any Clinton-Trump fatigue.
- Beyond the election wildcard, two underestimated factors impacting some retailers in a more concrete way are the lower level of SNAP (food stamps) benefits being paid out by the government and the elevated cost of health care. There is also the massive challenge with a millennial generation that shuns chains. Just ask anyone in the restaurant sector (NASDAQ:BITE).
- Add it all up and it makes for a challenging period for a mix of retailers that includes Dollar General (NYSE:DG), Dollar Tree (NASDAQ:DLTR), Fred's (NASDAQ:FRED), Ross Stores (NASDAQ:ROST), Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Staples (NASDAQ:SPLS), McDonald's (NYSE:MCD), Popeyes Louisiana Kitchen (NASDAQ:PLKI), Wendy's (NYSE:WEN), Supervalu (NYSE:SVU), Kroger (NYSE:KR), SIgnet (NYSE:SIG), TJX Companies (NYSE:TJX), and Casey's General Stores (NASDAQ:CASY).
- Retail ETFs: XLY, XRT, VCR, RTH, RETL, IYK, FXD, IYC, FDIS, SCC, RCD, UCC, PMR, UGE, SZK, CNDF, FTXD, JHMC.
Thu, Oct. 6, 7:51 AM
- Fred's (NASDAQ:FRED) reports comparable sales fell 4.9% in September.
- Total sales were down 5.5% to $199.9M.
- YTD sales are up 0.5% to $1.439B.
- Fred's on sales: "September sales faced a tough year-over-year comparison. The front store also experienced calendar shifts for federal assistance payments, continued substantial reductions in SNAP payments, and an increased impact related to competitive pricing strategies, particularly in consumables categories."
Tue, Oct. 4, 10:11 AM
- Cleveland Research downgrades Dollar Tree (DLTR -3.2%) to a Neutral rating from Buy after channel checks indicate a slowdown in sales trends.
- Headwinds in the discounter space include increased competition, price deflation in key categories, and a reduction in SNAP benefits.
- The investment firm's dour outlook on the sector is hitting Dollar General (DG -1.5%) and Fred's (FRED -2.2%) as well.
Mon, Oct. 3, 10:38 AM
Tue, Aug. 30, 8:39 AM
- Fred's (FRED) reports comparable-store sales fell 2% in Q2.
- Gross margin rate flat Y/Y at 24.2%.
- SG&A expense rate increased 60 bps to 24.1%.
- The company expects total sales and comparable-store sales to range from -1% to +1% for the second half of the fiscal year.
- Adjusted EBITDA expected to be in the range of $18M to $21M for the second half.
Tue, Aug. 30, 7:47 AM
Mon, Aug. 29, 7:14 PM
- Fred's (NASDAQ:FRED) says Chief Operating Officer Michael Bloom will become its new CEO, effective immediately, replacing Jerry Shore, who will retire from the job in February while remaining on the company's board.
- Bloom, who had more than 30 years of experience working retail and drug stores, joined Fred’s in January 2015 as COO and President, the same titles he held at Family Dollar Stores.
- Shore joined Fred's in 2000 as Executive VP and CFO after 11 years as CFO of Wang’s International, an importing and wholesale distribution company.
Mon, Aug. 29, 5:30 PM
Mon, Aug. 22, 3:02 PM
Fri, Aug. 19, 7:29 AM
- Fred's (NASDAQ:FRED) announced that it promoted Timothy Liebmann to the newly created role of Chief Operating Officer – Pharmacy, effective immediately.
- Liebmann, who was serving at the company as a VP of Pharmacy Services, succeeds Rick Chambers who is retiring from the company.
- Fred's operates three specialty pharmacy-only locations and 372 full service pharmacy departments located within Fred's stores.
- Source: Press Release
Tue, Aug. 16, 7:26 PM
- Merchandiser Fred's (FRED -2.3%) has elevated Mary Lou Gardner to the post of executive VP and chief merchandising and marketing officer, effective immediately.
- She replaces Bryan Pugh, who's resigned from Fred's.
- Gardner is relatively new to Fred's, joining at the beginning of the year as a senior VP. She most recently served in merchandising roles for CVS Health.
Tue, Aug. 9, 1:36 PM
- There's a dark mood in the apparel store sector after Gap (GPS -6.4%) spilled its July sales numbers.
- The retailer's 4% drop in comparable store sales for the month missed the -1% mark expected by analysts by a wide margin. Gap had raised hopes for a retail sector comeback with a return to a positive comp in June before the July disappointment.
- On a prerecorded sales call (855-500-0477 participant code 7405599), Gap management dropped a discouraging nugget: "We’re maintaining a cautious view of the retail environment in the second half."
- As a bit of a bellwether, the outlook from Gap is resonating across the retail sector. There's also a cut on same-store estimates for Target from Cleveland Research which could be drawing some attention.
- Retail decliners: Tailored Brands (TLRD -5.5%), Ascena Retail Group (ASNA -4.7%), Express (EXPR -4.4%), Citi Trends (CTRN -3.3%), Buckle (BKE -3.4%), Cato (CATO -3.3%), American Eagles Outfitters AEO, Abercrombie & Fitch ANF, Chico's FAS (CHS -2.6%), Kohl's (KSS -3.7%), Dillard's (DDS -2.9%), Macy's (M -2.4%), Fred's (FRED -3.3%), Target (TGT -3.1%), Tuesday Morning (TUES -1.5%), L Brands (LB -1.9%), Christopher & Banks (CBK -2.6%).
Mon, Aug. 8, 9:36 AM
- Shares of Fred's (FRED -7.3%) slump after Deutsche Bank shifts to a Sell rating and lowers its price target to $12.
- DB thinks the retailer will continue to see headwinds in the second half of the year as competition in the discounter sector ramps up.
- "We see potential for further downward guidance revisions, in the same vein as in 2H last year, and are modeling modestly below consensus for this year and next year," writes analyst Paul Trussell.
Thu, Aug. 4, 8:07 AM
- Fred's (NASDAQ:FRED) reports same-store sales declined 4.6% in July.
- Total sales fell 7% to $154.0M. The timing of government assistance funds and poor sales trends in the food, beverage, and paper/household chemicals categories were factors.
- The company says it now expects to report a loss in Q2 in the range of $0.18 to $0.24 per share.
Thu, Jul. 7, 8:02 AM
- Fred's (NASDAQ:FRED) reports comparable-store sales decreased 1.3% in June.
- Total sales were off 2.3% Y/Y to $213.3M.
- "Sales growth in core categories such as health and beauty aids, seasonal, apparel, toys, lawn and garden and electronics helped offset ongoing challenges in paper, chemicals and food that we have discussed on earlier occasions," notes CEO Jerry Shore.
- Fred's closed one full-service location during the month. The company and its subsidiaries operate 653 discount general merchandise stores (373 with full-service pharmacies) and three specialty pharmacies.