Fred's Sees Q1, 2016 Earnings Below View; Michael Hayes To Step Down As Chairman

(RTTNews) - While reporting its financial results for the fourth quarter today, Fred's Inc. (FRED) forecast earnings for the first quarter and fiscal 2016 below analysts' estimates.

The company also said that Michael Hayes, aged 74, will step down as chairman of the company's board of directors on April 15, 2016. Fred's board has appointed Thomas Tashjian, aged 61, a director of the company since 2001, as the new chairman of the board. With this succession, Hayes becomes Chairman Emeritus and will remain on the board of directors.

Tashjian, a private investor since 2001, has two decades of financial research experience as a noted institutional investment analyst for several major investment banking companies.

For the first quarter, Fred's forecast total sales to increase in a range of 8 percent to 12 percent and earnings per share in a range of flat to $0.03, compared with essentially flat earnings per share last year.

Comparable store sales for the first quarter are projected to increase in the range of 1 percent to 3 percent, compared with an increase of 0.8 percent in the first quarter last year.

On average, analysts polled by Thomson Reuters expect the company to report earnings per share of $0.08 for the quarter on revenues of $556.01 million. Analysts' estimates typically exclude special items.

For fiscal 2016, the company expects total sales to increase in a range of 5 percent to 9 percent, and earnings in a range of $0.27 to $0.32 per share, compared with adjusted earnings per share of $0.09 for fiscal 2015.

Comparable store sales for the year are expected to increase in the range of 2 percent to 5 percent, compared with an increase of 1.5 percent for fiscal 2015.

The Street expects earnings of $0.35 per share on revenues of $2.26 billion for the year.