May 28 (Reuters) - Discount-store operator Fred's Inc (FRED.O) posted an 18 percent rise in quarterly profit as lower expenses offset a slight dip in sales, and forecast a bigger second-quarter profit.

Fred's, which sells household cleaning supplies, health and beauty aids, paper products and beverages among other items, earned $8.6 million, or 21 cents a share, compared with $7.3 million or 18 cents a share, a year earlier.

Sales for the quarter ended May 2 were $458.4 million.

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