MEMPHIS, Tenn. (AP) -- Discount retailer Fred's Inc. said Thursday that revenue at stores open at least a year fell 4.2 percent last month as shoppers spent less money on fears about the economy.
The company also lowered its fourth-quarter earnings expectations, and its shares slipped in morning trading.
The December sales decrease was worse than Wall Street expected. Analysts, on average, expected a 1.5 percent decline, according to Thomson Reuters.
Revenue from stores open at least a year is considered a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
Fred's said that its total sales for December fell 1 percent to $209.9 million. For the year, total sales rose 2 percent to $1.78 billion, but fell 1.4 percent in stores open a year.
The company said that it expects fourth-quarter earnings between 25 cents per share and 31 cents per share. That's lower than the 31 cents per share to 36 cents per share it predicted in November.
Shares of Fred's fell 27 cents, or 2 percent, to $13.50 in morning trading Thursday.
CEO Bruce Efird said in a statement that customers cut spending of discretionary and weather-related items because of the economy. Despite the drop in sales, Efird said the company's layaway program was a success and prescriptions in its pharmacy department rose.
In 2013, the Memphis, Tenn.-based company plans to increase the number of pharmacies it operates and add more auto and hardware products. The company also plans to open a "smaller drug and dollar store concept," said Efird.
Fred's operates 712 discount stores in the southeastern United States.
- Investment & Company Information