GREENSBORO, NC - The Fresh Market posted an increase in net income and strong operating margins during its second quarter in 2015, but it just fell just shy of meeting Wall Street estimates.
The Fresh Market’s second quarter net income increased 53 percent to $17.5 million, or $0.36 per share, compared to $11.4 million, or $0.36 per share, during Q2 2014. Analysts polled by Thomson Reuters expected earnings of $0.40 per share for the quarter, according to NASDAQ.
Net sales increased 4.7 percent to $442.1 million, while comparable store sales decreased 1.0% to $392.7 million, according to the financial report. NASDAQ reports that analysts estimated $458.34 million for the quarter.
Sean Crane, Interim CEO, said even though changes in pricing and promotional investments made during the second quarter were less effective than anticipated, the financial health of the business continues to remain sound as the retailer delivers some of its strongest adjusted EBITDA margins and returns on invested capital in the industry.
“We are committed to increasing our profitability as we work to stabilize and improve our future comparable store sales,” said Crane. “As we move forward, we remain focused on our initiatives to build The Fresh Market brand, elevator our in-store experience and food offering, and capture greater operational efficiencies.”
The Fresh Market opened six stores during the second quarter, including two stores in Texas, and one store each in North Carolina, Georgia, Louisiana, and New York. During a conference call with investors, Crane said he was encouraged by the early response to these grand openings and expects that store remodels and refreshes will improve the customer experience and future sales.
While the Board continues to interview candidates for the CEO position, the company is also looking for an associate to replace Marc Jones, The Fresh Market’s Senior Vice President, Chief Merchandising and Supply Chain Officer. Jones is leaving the company, effective immediately.
“We appreciate Marc’s contributions over the years,” Crane said during the call. “A search is already underway for his replacement, as we are targeting an individual who will help us accelerate the improvement of our pricing, selection, and merchandise offering.”
The Fresh Market recently hired 20-year supply chain veteran Maria Ross to the newly created position of Vice President, Supply Chain. Ross will be responsible for overseeing The Fresh Market’s supply chain, including procurement, warehousing, logistics, and transportation management.
The Board of Directors also authorized a $200 million stock repurchase program, which Jeff Ackerman, CFO, said reflects the company’s strong, debt-free financial position and continued confidence in its long-term growth opportunities.
In conclusion, Crane said that the company’s long-term outlook is positive and that he believes The Fresh Market is taking the right steps to improve its operating model.
Stay tuned to AndNowUKnow as we continue to follow The Fresh Market’s financial performance in Q3 2015 and beyond.
