Fred’s, Inc. (NASDAQ:FRED) Records Strong Progress In 2016 Based On New Healthcare Strategy

Fred’s, Inc. (NASDAQ:FRED)

Shares of Fred’s, Inc. (NASDAQ:FRED) jumped more than 13% yesterday, after the firm posted better-than-expected Q4 2016 earnings. The company generated revenue of $529.7 million, which was just a short of the $530.7 million that analysts were anticipating. For Q4 2016, the company posted a net loss of almost $22.5 million.

The management view

Commenting on the report, Michael K. Bloom, the CEO of Fred’s, Inc. (NASDAQ:FRED), reported that over the last months they have started to see the positive impacts of the measures they implemented in 2016. They are now witnessing bottom-line improvement led by sequential development in Retail Pharmacy, sequential growth in sales trends in the Specialty Pharmacy unit, robust holiday seasonal category sales and Front Store margin expansion.

The management believes that their comprehensive plan and strategy to enhance performance is on target. Remarkably, they have launched a series of measures that will continue to build a foundation for future company success. The company is upgrading talent; diversifying the specialty pharmacy portfolio, investing in technology, enhancing the customer and patient experience, expanding margins, increasing supply chain efficiencies and optimizing assets to enhance performance and cash flow.

Fred’s, Inc. (NASDAQ:FRED) CEO added that while they are delighted with the progress they have recorded in such a short period, they faced headwinds that resulted in challenging second and third quarters. They started to reap the advantages of their strategic measures in Q4 2016 as noted by strong sequential improvement.

They anticipate the promising trends they witnessed in the fourth quarter to continue. Considering the organization as a whole, they anticipate recording continued sequential bottom-line growth in 2017 as the ongoing initiatives take hold. The management is keenly focused on positioning the firm for long-term growth and improving value for shareholders.

Fred’s net sales for Q4 2016 came at $529.7 million compared to $554.6 million for the same quarter previous year. Comparable store sales came in at -3.6% compared to a 1.7% jump in comparable store sales in Q4 2015. This reported number included a negative 2.6% impact following the sale of obsolete inventory compared to Q4 2015. Gross profit for Q4 2016 decreased to $129.6 million from $132.9 million in the previous year period.

Fred’s, Inc. (NASDAQ:FRED) has been recognized by TrendSpotter as a ‘Sell’ through its algorithm-driving system based on stock’s volatility, momentum and wave theory.

Ticker Symbol FRED
Last Price a/o 3:21 PM EST  $ 14.29
Average Volume 1.21M
Market Cap (mlns) $ 535.16M
Shares Outstanding (mlns) 37.45M
Share Float (mlns) 35.11M
Inside Ownership 4.80%
Short Float 39.68%
Short Interest Ratio 11.49
Quarterly Return -20.08%
YTD Return -22.75%
Year Return 2.19%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

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Monica has an undergraduate degree in Accounting and an MBA she earned - with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

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