The company also names a new chairman

MEMPHIS — Fred’s Inc. reported improved results for its fiscal 2015 fourth quarter and fiscal year on Wednesday. The company also announced that Michael Hayes, 74, is slated to step down as chairman of the board of directors on April 15, to be succeeded by director Thomas Tashjian, 61. Hayes will become chairman emeritus and remain on the board.

The change in board leadership came as Fred’s reported a narrowed loss of $3.9 million in its fiscal 2015 fourth quarter, compared with a loss of $8.2 million in the prior-year period. For the full year, its loss shrank to $7.4 million from the fiscal 2014 loss of $28.9 million.

Total sales for the quarter were up 10% from a year earlier to $554.6 million. Comparable-store sales rose 1.7% in the period, the company said.

“Fred’s financial performance for the fourth quarter — from the top line through adjusted earnings — reflected increasing momentum of significant improvements that we have made throughout our company over the course of the past year,” Fred’s chief executive officer Jerry Shore said in a statement. “We were very pleased with the total sales increase, which was driven by the growth in specialty pharmacy, the success of our holiday seasonal programs and the expanded product assortments throughout our stores. The team refocused merchandising for the holiday period, which was well received by our customers. With improved supply chain efficiency, merchandise was in the stores earlier to ensure that our customers knew that Fred’s was in the holiday business in 2015. An enhanced merchandising plan was communicated to the stores, which improved our operators’ ability to execute. All of this was supported by a stronger marketing effort.”

Shore was promoted to CEO from chief financial officer in late 2014 to lead the shift to what the company called a “convenient pharmacy-centric model.” As part of that strategy, Fred’s has accelerated its pharmacy acquisitions and added management talent. The company last fall hired retail pharmacy veteran John Foley as executive vice president of store operations.

Fred’s is forecasting total sales growth of between 8% and 12% in the 2016 first quarter. The company estimates that comparable-store sales will increase between 1% and 3% in the period. For the full year, Fred’s forecasts total sales growth of between 5% to 9% and a 2% to 5% increase in comparable-store sales.

Shore said Fred’s will continue to invest this year “to further modernize the foundation of the company.” He added: “We are excited about the momentum we carry into 2016, and our team is committed to improving outcomes for our customers, together with a totally reimagined shopping experience, as we work to deliver strong shareholder returns next year and afterwards.”

Fred’s and its subsidiaries operate 659 discount general merchandise stores and three specialty pharmacy-only locations in 15 states in the Southeast, including 18 franchised locations. There are 372 full-service pharmacy departments located within Fred’s stores, including five franchised locations.

Hayes, who was elected as director of the company in January 1987 and served as chief executive officer from October 1989 to January 2009, says Fred’s is well positioned to succeed going forward.

“The past 18 to 24 months have been the most challenging of my career, as the company and its board of directors recognized the need to refocus the company, rebuild its management structure, rework our bank agreements and execute our largest acquisition to date: Reeves-Sain Drugs and EntrustRx,” Hayes said in a statement. “This acquisition substantially strengthened our position in the specialty pharmacy business, the fastest-growing segment in pharmacy.

“Because of the tireless work of Jerry Shore and the board of directors, we now have in place a successful, experienced and energetic management team, focused on driving deeper into health care, and also stronger general merchandising departments,” Hayes added. “What is now needed is an energetic chairman that has both the vision and skill set to keep this momentum going, and I believe Tom Tashjian is the right person to do this, and now is the right time.”

Tashjian, a private investor, has served as a director at Fred’s since 2001. From 1996 and 2001, he was a managing director and consumer group leader at Banc of America Montgomery Securities in San Francisco, where he provided the firm’s views on the retailing industry. Prior to that, he held similar positions at First Manhattan Company, Seidler Companies, and Prudential Securities. His earlier retail operating experience was in discount retailing at the Ayrway Stores, which was acquired by Target, and in the restaurant business at Noble Roman’s.