Fred's Q3 net loss $10.4 millionStaff writer ▼ | November 26, 2014
Fred's reported financial results for the third quarter and nine months ended November 1, 2014. Fred's net loss totaled $10.4 million or ($0.28 per diluted share compared with net income of $7.3 million or $0.20 per share for Q3 2013.
Not so good quarter It could have been better
The company closed five stores in the third quarter and will close 47 stores in the fourth quarter. Included in the third quarter results are provisions to establish reserves for closed-store inventory and additional above-cost markdowns on low-productive inventory.
In total, these provisions in the third quarter amounted to $5.6 million on a pretax basis or $0.10 per share after tax. Also, in the third quarter, selling, general and administrative expenses were negatively affected by nonrecurring charges totaling $1.2 million on a pretax basis or $0.02 per share after tax, primarily related to the settlement of certain state franchise and income tax obligations.
Excluding reserve impacts and non-operational charges, Fred's net loss for the quarter was $6.2 million or ($0.16 per share. In the second quarter, provisions to establish reserves for inventory clearance and store closings totaled $14.8 million on a pretax or $0.26 per share after tax.
Excluding reserve impacts and non-operational charges during the year-to-date period, Fred's net loss for the first nine months of fiscal 2014 was $7.2 million or ($0.19 per share. Fred's total sales for the third quarter of fiscal 2014 increased 3% to $476.2 million from $460.5 million for the same period last year.
On a comparable store basis, third quarter sales increased 0.3% on top of an increase of 1.4% for the year-earlier period. Fred's total sales for the first nine months of fiscal 2014 increased 2% to $1.466 billion compared with $1.444 billion for the same period last year.
On a comparable store basis, year-to-date sales decreased 0.5% compared with an increase of 1.1% in the same period last year. ■