Fred’s Inc. FRED has been reporting higher comparable-store sales (comps) for quite some time now driven by its sales-boosting initiatives and the recent growth in the specialty pharmacy department.On Apr 6, Fred’s reported approximately 1.8% year-over-year comps growth for five weeks in the month of Mar 2016. Comps growth was within the company’s expectation of an increase of 1% to 3%. The improvement was backed by strong growth in general merchandise departments across most categories, especially in health, beauty, personal care, apparel, spring seasonal and Easter holiday merchandise. Comps were however unfavorable when compared to an increase of 1.9% a year ago.The traffic-driving initiatives by the pharmacy department also bore fruit during the month.Total sales for March increased 11% to $214.4 million from $193.6 million in the year-ago period backed by contribution from EntrustRx specialty pharmacy acquired in April 2015. Total sales growth was on the high end of management’s guidance of 8% to 12% sales growth.For the first two months of fiscal 2016, total sales increased 11% to $385.8 million from $346.8 million for the same period last year. Comps gained 1.3% for the mentioned period versus an increase of 0.9% a year ago.As of Apr 2, 2016, Fred's operated 660 discount general merchandise stores, including 18 franchised locations and three specialty pharmacy-only locations in 15 states in southeastern United States. There are 373 full service pharmacy departments located within Fred's stores, including four franchised locations.This Zacks Rank #4 (Sell) stock is recovering as sales and profitability initiatives are paying off. However, we are concerned about declining margins.Stocks to ConsiderSome better-ranked stocks in the same space are Burlington Stores Inc. BURL, Dollar General Corporation. DG and Target Corporation TGT, each carrying a Zacks Rank #2 (Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DOLLAR GENERAL (DG): Free Stock Analysis Report TARGET CORP (TGT): Free Stock Analysis Report FREDS INC (FRED): Free Stock Analysis Report BURLINGTON STRS (BURL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research