Fred's Earnings Preview

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After beating estimates last quarter by $0.02, Fred's (NAS: FRED) has set the standard for itself. The company will unveil its latest earnings on Wednesday, March 21. Fred's and subsidiaries are engaged in the sale of general merchandise through its retail discount stores and full service pharmacies.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Fred's with five of nine analysts rating it hold. Analysts don't like Fred's as much as competitor Gordman Stores overall. Four out of five analysts rate Gordman Stores a buy compared to three of nine for Fred's. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $498.3 million in revenue this quarter. That would represent a rise of 2.6% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.24 per share. Estimates range from $0.23 to $0.25.

What our community says:
CAPS All-Stars are solidly behind the stock, with 78.6% giving it an "outperform" rating. The greater community is in line with the All-Stars, as 80% give it a rating of "outperform." Despite the majority sentiment in favor of Fred's, the stock has a middling CAPS rating of three out of five stars.

Management:
Fred's' profit has risen year-over-year by an average of 20.8% over the past five quarters. Revenue has now gone up for three straight quarters.

Now, a look at how efficient management has been at running the business. Margins are a representation of how efficiently a company captures portions of sales dollars. The company's net margins have been increasing year-over-year for the last four quarters. Net margins reflect what percentage of revenue becomes profit. See how Fred's has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

30.6%

28.0%

28.5%

27.7%

Operating Margin

3.1%

1.8%

3.1%

2.8%

Net Margin

2.0%

1.1%

2.0%

1.8%

One final thing: If you want to keep tabs on Fred's movements, and for more analysis on the company, make sure you add it to your Watchlist.

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