Fred's affirms outlook for 2008 profit

Discount retailer and pharmacy chain Fred's Inc. on Thursday reiterated its outlook for 2008 income between 54 cents and 58 cents per share.

Excluding the cost of an ongoing restructuring, Fred's expects earnings per share of 72 cents to 76 cents.

On average, analysts polled by Thomson Reuters expect income of 71 cents per share on revenue of $1.8 billion.

In the third quarter, Fred's expects profit of 16 cents to 18 cents per share, representing growth of 33 percent to 50 percent from the same period last year.

Analysts expect income of 17 cents per share on revenue of $415 million in the third quarter.

Fred's also said it expects third-quarter sales to be flat compared with last year, as it closes stores and pharmacies as part of its restructuring.

Same-store sales are expected to rise by 1 percent to 3 percent in the third quarter, Fred's said. Same-store sales, or sales at stores open at least a year, is an important retail performance indicator because it measures sales at existing stores rather than newly opened ones.

Shares of Fred's fell 14 cents to $13.76 shortly after the opening bell.