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Fred’s same-stores sales dip in 3Q, but asset transfer deal with Walgreens is nearly complete

Walgreens announced in September that it had acquired pharmacy files from 185 Fred’s locations for $165 million
Fred's Pharmacy
Fred’s same-store sales slipped more than 5% in its third quarter

Fred’s Inc (NASDAQ:FRED) missed on revenue and widened its net loss in its third-quarter as its same-store sales dipped, but its million-dollar asset transfer deal with Walgreen is nearing completion.

Shares of the Memphis-based company dipped nearly 12% to $2.23 in Thursday pre-market trading.

The pharmacy chain reported a net loss of $0.83 per share compared with flat earnings in the previous third quarter.

READ: Bausch Health bids on Synergy Pharmaceuticals for $200 million, but competing bids may follow

Quarterly revenue totaled $306.4 million, well below the consensus estimate of $402.4 million.

Same-store sales were down 5.3% in the third quarter compared with a 1% decline a year ago.

In September, Fred’s announced that Walgreens Boots Alliance Inc (NASDAQ:WBA) had acquired pharmacy files from 185 locations for $165 million.

As of December, the company transferred files from 138 locations and plans to send over files from the remaining 48 locations by the end of January 2019.

“There is still much work to be done with regards to our operations. We are continuing to execute against our turnaround plan, with a focus on bringing in talent, optimizing our cost structure and improving the front store business,” said interim CEO and CFO Joe Anto in the company’s press release.

Fred’s has been building out a strategy to monetize its non-core assets, including its pharmacy files and real estate.

Rumors are swirling of a potential move out of Memphis after a Memphis Business Journal report found the company’s headquarters listed in Colliers International, but a move has not been confirmed.

 

Contact Lenore Fedow at [email protected]

Follow her on Twitter@LenoreMariee

 

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