MEMPHIS, Tenn. (AP) — Discount retailer Fred’s Inc. reported Thursday that a key revenue figure fell 1.5 percent in February.
Fred’s also lowered its fourth quarter guidance due to markdowns and higher-than-expected costs.
Company CEO Bruce Efird said delayed tax returns and an increased payroll tax weighed on customer’s spending patterns, but there were some bright spots.
Revenue in stores open at least one year increased for general merchandise, and the company’s spring layaway program was popular.
Overall, revenue in stores open at least one year for the month ended March 2 fell 1.5 percent. Analysts expected a slightly smaller 1.3 percent decline, according to Thomson Reuters.
Total revenue for the period was nearly flat at $159.2 million.
The company now expects net income of 16 cents to 21 cents per share, from prior guidance of 31 cents to 36 cents per share. Analysts expect 28 cents per share. The cut is due to markdowns on basic products and food, as well as higher-than-expected insurance and other operating costs.
Fred’s, based in Memphis, Tenn., operates 713 discount general merchandise stores.
