Fred's (FRED) Sets New 1-Year Low Following Weak Earnings

Fred's, Inc. (NASDAQ:FRED) hit a new 52-week low during mid-day trading on Wednesday following a dissappointing earnings announcement. The stock traded as low as $4.09 and last traded at $5.09, with a volume of 943900 shares. The stock had previously closed at $5.21.

The company reported ($0.42) earnings per share (EPS) for the quarter, missing the Thomson Reuters’ consensus estimate of ($0.13) by ($0.29). Fred's had a negative net margin of 6.08% and a negative return on equity of 4.02%. The company had revenue of $493.60 million during the quarter, compared to analyst estimates of $499.77 million. During the same period last year, the firm earned ($0.27) EPS. The business’s quarterly revenue was down 4.5% compared to the same quarter last year.

Fred's declared that its Board of Directors has authorized a stock buyback plan on Wednesday, December 6th that allows the company to repurchase 3,800,000 shares. This repurchase authorization allows the company to reacquire shares of its stock through open market purchases. Stock repurchase plans are generally an indication that the company’s leadership believes its shares are undervalued.

Several brokerages recently weighed in on FRED. Zacks Investment Research lowered Fred's from a “hold” rating to a “sell” rating in a research note on Thursday, September 7th. Loop Capital began coverage on Fred's in a research note on Thursday, August 24th. They issued a “hold” rating and a $6.00 price target for the company. Two analysts have rated the stock with a sell rating, four have given a hold rating and one has given a buy rating to the company. Fred's has a consensus rating of “Hold” and a consensus price target of $13.50.

A number of large investors have recently bought and sold shares of the business. Vanguard Group Inc. increased its stake in Fred's by 0.9% during the 2nd quarter. Vanguard Group Inc. now owns 3,284,949 shares of the company’s stock worth $30,321,000 after buying an additional 30,719 shares in the last quarter. State Street Corp increased its stake in Fred's by 12.8% during the 2nd quarter. State Street Corp now owns 1,271,228 shares of the company’s stock worth $11,732,000 after buying an additional 144,437 shares in the last quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS purchased a new stake in Fred's during the 2nd quarter worth approximately $11,058,000. Schwab Charles Investment Management Inc. increased its stake in Fred's by 26.2% during the 3rd quarter. Schwab Charles Investment Management Inc. now owns 675,331 shares of the company’s stock worth $4,350,000 after buying an additional 140,163 shares in the last quarter. Finally, Bank of New York Mellon Corp increased its stake in Fred's by 4.3% during the 2nd quarter. Bank of New York Mellon Corp now owns 550,478 shares of the company’s stock worth $5,081,000 after buying an additional 22,736 shares in the last quarter.

The company has a debt-to-equity ratio of 0.51, a quick ratio of 0.45 and a current ratio of 1.90.

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Fred's Company Profile

Fred’s, Inc (Fred’s) is engaged in the sale of general merchandise through its retail discount stores and full service pharmacies. The Company sells general merchandise to its over 20 franchisees. The Company has approximately 660 retail stores, over 370 pharmacies, and approximately three specialty pharmacy facilities located in over 15 states mainly in the Southeastern United States.

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