MEMPHIS, Tenn. — Fred’s, Inc. reported financial results for the second quarter and six months ended August 4, 2018. Net sales down 4.3% to $419.7 million in second quarter 2018 versus $438.5 million 2017.

Fred’s Interim chief executive officer and chief financial officer, Joe Anto, stated, “We are continuing to make progress against our two main goals of eliminating our debt balance and returning to profitability by the fourth quarter of this year. While there is still much work to be done, we are moving in the right direction and are excited about the momentum we have at the company.”

We recently announced an agreement with Walgreens Boots Alliance, Inc.  to sell pharmacy prescription files associated with 185 Fred’s stores. This transaction should allow Fred’s to almost entirely reduce the balance on our ABL Facility, allowing us to focus on returning our remaining business to profitability. We expect to close this transaction over the course of the fourth quarter,” he added.

Heath Freeman, chairman of the board, said: “We have made significant strides in recent months in right-sizing our cost structure and working towards reducing our debt. We remain confident that over the balance of 2018 we will be able to stabilize our revenues and improve our free cash flow, setting us up to enter 2019 with significant momentum.”

Fred’s net sales for the second quarter of fiscal 2018 decreased 4.3% to $419.7 million from $438.5 million in the second quarter last year. Comparable store sales for the quarter decreased 3.5% compared to a 3.0% decrease the second quarter of last year. Comparable store sales were down 6.1% for the front store and down 0.5% in the retail pharmacy. A significant reduction in circular marketing was the main driver of reduced comparable store sales in the front store for the quarter. During August, the company reinstated marketing programs consistent with prior levels, which it expects will improve the trend seen in the front store during the second quarter.