Why Fred’s, Inc. (FRED) 5% on 09/08/17?
Fred’s, Inc. (FRED) jumped 5% as a result of Bullish news signal:
Fred’s Inc. today reported financial results for the second quarter and six months ended July 29, 2017.
For the second quarter ended July 29, 2017, Fred’s recorded a net loss of approximately $29.5 million or $0.78 per share, which included the following charges totaling $30.1 million, or $0.63 per share after tax:
- $11.3 million or $0.30 per share after tax for a valuation allowance against the Company’s deferred tax asset resulting from the pretax loss recorded during the second quarter;
- $15.2 million or $0.26 per share after tax for bank fees, financing termination fees, prior period deferred expenses recognized in the current quarter for certain contract terminations and amendments, and other professional and legal advisory fees incurred in connection with the proposed acquisition of Rite Aid stores; the development and implementation of the Company’s growth strategy; and other professional and legal advisory fees;
- $2.8 million or $0.05 per share after tax for asset impairments and other expenses pertaining to the planned closure of 13 stores and certain pharmacy departments, as part of Fred’s ongoing asset management of its overall chain; and
- $0.8 million or $0.02 per share after tax for other non-recurring charges.
Net sales for the second quarter were $507.8 million, down 4.1% from $529.5 million in the same period last year. Comparable store sales for the second quarter declined 0.3% versus a decrease of 2.0% in the second quarter last year. Comparable store sales in the second quarter of 2017 included a negative 0.8% impact as a result of the sale of low productive discontinued inventory versus the second quarter of 2016.
Gross profit for the second quarter of 2017 decreased to $126.0 million from $128.1 million in the prior-year period, primarily explained by a decrease in sales resulting from the closure of 39 underperforming stores. Gross profit margin for the quarter increased 60 basis points to 24.8% from 24.2% in the same quarter last year, reflecting the benefit of key turnaround initiatives intended to drive profitability and cash flow.
Fred’s recorded a LIFO reserve reduction of $0.3 million in the second quarter of 2017 compared with an increase of $0.2 million in the same quarter last year.
First Six Months Ended July 29, 2017
For the first six months ended July 29, 2017, Fred’s recorded a net loss of approximately $66.0 million or $1.76 per share, which included the following charges totaling $75.0 million, or $1.55 per share after tax:
- $25.8 million or $0.69 per share after tax for a valuation allowance against the Company’s deferred tax asset resulting from the pretax loss created primarily by the following charges in the first six months of 2017;
- $32.1 million or $0.55 per share after tax for bank fees, financing termination fees, other professional and legal advisory fees incurred in connection with the proposed acquisition of Rite Aid stores and the development and implementation of the Company’s growth strategy;
- $16.3 million or $0.29 per share after tax for lease liability impairment, asset impairments and other expenses pertaining to the closure of 39 underperforming stores and the planned closure of 13 stores and certain pharmacy departments, as part of Fred’s ongoing asset management of its overall chain; and
- $0.8 million or $0.02 per share after tax for other non-recurring charges.
“Our Retail Pharmacy business continues to improve, delivering flat comp scripts year-to-date adjusted for 90 days, and increases in our Generic Dispensing Rate and our overall gross profit dollars per script. In Specialty Pharmacy, we continue to drive sales growth through geographic expansion into new markets and diversification within our existing therapies. Despite ongoing headwinds in Consumables in the Front Store, we experienced a 60 basis point improvement in comparable sales in our General Merchandise division over the same quarter last year.”
Why Bullish? its Retail and Specialty Pharmacy businesses are improving significantly, and the momentum is likely to continue throughout fiscal 2017. The stock has been impacted by the bullish news and jumped by 5%. It is very common that these type of news (i.e. strong financial results) will impact the stock in a bullish manner. Therefore, we provide this stock a short-term bullish signal
Latest price: 6.8
Entry level: 6.79
Exit level: 7.2
Stop level: 6.4
(Views and recommendations given in this section are for research purpose only. Please consult your financial adviser before taking any position in the stock/s mentioned.) Neither First to invest. nor any of its officers, employees, representatives, agents or independent contractors are, in such capacities, licensed financial advisors, registered investment advisers or registered broker-dealers. First to invest does not provide investment or financial advice or make investment recommendations. Nothing contained in this communication constitutes a solicitation, recommendation, promotion, endorsement or offer by First to invest of any particular security, transaction or investment. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers
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- Lululemon Athletica Inc. (LULU): Lululemon beats Street 2Q forecasts. Read More
Why Bullish? For the current quarter ending in November, Lululemon expects its per-share earnings to range from 50 cents to 52 cents. Therefore, will impact the stock in today trade and up to 2-14
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- ImmunoGen, Inc. (IMGN): Jazz Pharmaceuticals and ImmunoGen, Inc. Announce a Strategic Collaboration and Option Agreement to Develop and Commercialize Antibody-Drug Conjugate Products. Read More
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- Ambarella Follows a Strong Quarter With Disappointing Guidance (Again) Read more
Why Bearish? Ambarella continued to see declines in shipments for the drone market, driven by both timing of new product launches and ongoing weakness from Tier 2 drone customers. Therefore, will impact the stock in today trade and between 2-14 days
Latest price: 45.37
Entry level: 43.1
Exit level: 46.2
Stop level: 41.9
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