Wired News – Pharmacy and General Stores Operator Fred’s Cancels Payment of Dividend; Explores Strategic Options for Non-core Assets

Stock Monitor: Burlington Stores Post Earnings Reporting

LONDON, UK / ACCESSWIRE / December 08, 2017 / Active-Investors issued a free report on Fred's Inc. (NASDAQ: FRED), which is readily accessible upon registration at www.active-investors.com/registration-sg/?symbol=FRED as the Company's latest news hit the wire. On December 06, 2017, the Company reported its Q3 2017 results and announced that its Board of Directors have canceled the payment of cash dividend to its shareholders for this quarter. The decision was taken after the Company reported losses in Q3 2017. The Company's aim is to ensure that it retains enough cash to pay off its debt, invest in share buybacks, and make provisions for other business-related purposes. Sign up now for our free research reports at:

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Active-Investors.com is currently working on the research report for Burlington Stores, Inc. (NYSE: BURL), which also belongs to the Services sector as the Company Fred's. Do not miss out and become a member today for free to access this upcoming report at:

www.active-investors.com/registration-sg/?symbol=BURL

Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Fred's most recent news is on our radar and we have decided to include it on our blog post. Today's free coverage is available at:

www.active-investors.com/registration-sg/?symbol=FRED

Explaining the Company's stand on the matter, Michael K. Bloom, CEO of Fred's, said:

"We are excited about the progress we have made in executing our strategic turnaround plan, which followed an exhaustive and comprehensive evaluation of our business, and which has prioritized driving traffic, reducing SG&A expenses as a percentage of sales, reducing our leverage levels over time, driving profitability and generating free cash flow per share. We believe that we now are in a position to further enhance our strategic plan by exploring a variety of strategic initiatives and by investing in our common stock which we believe, given current share prices, represents an attractive use of funds and provides us an additional opportunity to build long-term value for our shareholders."

Share Repurchase Program

The Company's Board disclosed that it has altered its 2012 share repurchase program and after the amendment, the new share repurchase program will enable the Company to buy nearly 3.8 million of its Class A voting shares. The amendments will allow the Company to acquire these shares via an automatic trading plan and discretionary purchases through the open market, block trades, or in privately negotiated transactions. The number of shares bought, and amount utilized, will depend on factors like trading price, trading volume, and general market conditions, and there are no guarantees that an x number of shares will be repurchased. The new share repurchase program will be in effect for two years and the Board has the option of modifying, extending, or terminating the program at any time. The Company plans to utilize the cash in hand as well as funds available from its existing credit facilities with its lenders.

Strategic Options for non-core assets

The Company's renewed focus will be on areas like increasing store traffic, improving gross margin, reducing SG&A (Selling, General, and Administrative) expenses, and generating free cash flow per share. To achieve these goals, the Company is exploring various strategic options for its non-core assets, including the Company's real estate and the specialty pharmacy business' sales. The Company has clarified that it is not taking this decision because of any proposals from third parties and till date the Company has not reached any decision on these matters.

Financial performance in Q3 2017

The Company reported its financial results for Q3 2017 for the nine-month period ended on October 28, 2017.

The Company reported net loss of approximately $51.8 million, or $1.38 per share, for Q3 2017 which is $17.4 million higher than its net loss of $38.4 million, or $1.05 per share, for Q3 2016.

Net sales were $493.6 million for Q3 2017 compared to net sales of $516.6 million in the same period in 2016. The Company attributed this decline to the closure of 39 underperforming stores in FY17.

Gross Profit was $94.6 million for Q3 2017 compared to $111.2 million in Q3 2016. The Company explained that the gross profit was affected due to a decrease in sales and increased spending on promotions to increase store traffic.

The SG&A expenses for Q3 2017 was $144.4 million, or 29.3% of sales, compared to SG&A expenses of $155.3 million, or 30.0% of sales, in Q3 2016. This was a positive achievement for the Company as it has implemented various cost-cutting measures including the closure of 39 underperforming stores earlier this year.

About Fred's Inc.

Memphis, Tennessee based Fred's has been in the business since 1947 when it opened its original store in Coldwater, Mississippi. The Company operates 601 pharmacy and general merchandise stores and three specialty pharmacy-only locations. The Company's Pharmacy stores offer more than 12,000 frequently purchased items for healthcare and everyday needs and includes nationally recognized brands, proprietary Fred's Pharmacy label products, and a full range of value-priced selections. The Company has two distribution centers at Memphis, Tennessee, and Dublin, Georgia.

Stock Performance Snapshot

December 07, 2017 - At Thursday's closing bell, Fred's stock declined 1.09%, ending the trading session at $4.09.

Volume traded for the day: 1.24 million shares, which was above the 3-month average volume of 1.05 million shares.

After yesterday's close, Fred's market cap was at $156.88 million.

The stock has a dividend yield of 5.86%.

The stock is part of the Services sector, categorized under the Discount, Variety Stores industry. This sector was up 0.4% at the end of the session.

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