GREENSBORO, NC – Shares in The Fresh Market were on a slump shortly after the specialty grocer reported weaker results in its third quarter financial report.
The company’s stock slid approximately 4% to $23.23 after it reported a decline in sales for its established stores. Store closures and leadership changes also had a negative effect on its quarterly performance.
Rick Anicetti, The Fresh Market’s newly appointed CEO and President, was optimistic in light of these results, noting that the company’s brand has “enormous untapped potential.”
“With the holiday season fast approaching, we are making changes as quickly as prudently possible to our productivity, price optimization, and brand differentiation to help stabilize traffic trends and drive sales during this key shopping period,” he said in a press release.
Anicetti continued by saying the management team and the Board of Directors are “simultaneously moving forward aggressively with a number of initiatives to strengthen the company’s foundation, increase productivity, drive store traffic, and regain operating momentum.”
The news comes shortly after rumors emerged that The Fresh Market was considering a potential sale in mid-October. Just a few days later, the company announced that it is currently conducting a strategic and financial review of the business, which could result in The Fresh Market moving forward as a standalone company, a capital structure optimization, or a sale of the company or other business combination. No further update was given regarding the progress of the review in the report, however.
Though its third quarter results may seem bleak, it’s clear that the company is still looking to expand the business. The Fresh Market currently has leases signed for 24 new stores, expected to open during or after fiscal 2015. During its third quarter, the company opened six new stores, including two stores in Florida, and one each in South Carolina, Georgia, Alabama, and Connecticut. As of October 25, 2015, The Fresh Market operated 180 stores in 27 states.
In its third quarter of 2015, The Fresh Market reported that its sales increased 3.3% to $433.1 million. Comparable store sales, however, decreased 3.7% to $386.5 million.
Other highlights from the third quarter include:
- Adjusted EBITDA was $37.5 million, compared to $39.1 million in Q3 2014. Adjusted EBITDA for Q3 2015 was 8.7% of sales, compared to 9.3% of sales in Q3 2014.
- Gross profit increased 4.3%, or $5.9 million, to $144 million, compared to Q3 2014. Gross margin was 33.2%, compared to 32.9% in Q3 2014.
- The company generated $28.1 million in cash flow from operations during Q3 2015, compared to $30 million in Q3 2014. The company ended the quarter with a cash balance of $37.3 million.
The Fresh Market has been facing increased pressure from competitors, but what can we expect to see from this “strategic review” and will Anicetti’s proposed changes be enough to turn things around in the fourth quarter? We’ll have to wait and see. Stay tuned to AndNowUKnow as we continue to follow any further updates.
