Fred's, Inc. Announces Unaudited Earnings Results for the Second Quarter and Six Months Ended August 4, 2018; Provides Earnings Guidance for the Full Year 2018
For the first six months, the company's net sales for the first half of fiscal 2018 decreased 5.1% to $856.771 million from $902.699 million in the first half of fiscal 2017. Comparable store sales for the six month period decreased 3.7% compared to a 3.6% decrease the first six months of last year. Comparable store sales were down 5.1% for the front store and down 2.0% in the retail pharmacy. Operating loss from continuing operations was $39.496 million against $62.834 million a year ago. Loss from continuing operations before income taxes was $43.204 million against $65.558 million a year ago. Net loss from continuing operations was $42.779 million against $66.687 million a year ago. Net loss was $54.315 million against $65.978 million a year ago. Net loss per share from continuing, basic and diluted was $1.17 against $1.78 a year ago. LBITDA was $31.190 million against $40.582 million a year ago. Adjusted LBITDA, a non-GAAP financial measure that further excludes depreciation and amortization and non-recurring items from EBIT, was $11.111 million compared to EBITDA of $8.081 million in the first half of 2017. Net cash used in operating activities was $15.847 million against net cash provided by operating activities of $0.928 million a year ago. Capital expenditures were $5.026 million against $7.278 million a year ago.
The company is continuing to make progress against the company's two main goals of eliminating its debt balance and returning to profitability by fourth quarter of the year 2018. While there is still much work to be done, the company is moving in the right direction and are excited about the momentum it has at the company. The company has made significant strides in recent months in right-sizing its cost structure and working towards reducing its debt. The company remains confident that over the balance of 2018 it will be able to stabilize its revenues and improve its free cash flow, setting up to enter 2019 with significant momentum. The company still expects CapEx for the year to be around $15 million and this includes investments related to the start of the company's ERP implementation.