Although Fresh Market’s net sales exceeded Wall Street expectations, the company reported a decrease in profit for the first quarter of fiscal 2014, which it attributed to a slow start to the year brought on by severe weather in the majority of its markets.
Net sales increased 18% to $431 million from $366.63 million in the prior-year quarter, while net income fell 25% to $16.57 million from $22.12 million in the prior-year quarter. Same-store sales climbed 2.5%.
During the quarter, the company opened seven new stores, including three stores in Florida, two stores in North Carolina and one each in Virginia and Illinois. As of April 27, the company operated 154 stores in 26 states. It anticipates opening four new stores in the second quarter and 12 to 13 new stores in the second half of the year, and plans on remodeling four-to-five stores.
“We are pleased with our first quarter performance, especially given the weather-challenged start to the quarter in the majority of our markets,” said president and CEO Greg Carlock. “Our positive same-store sales and steady trends in customer traffic throughout the quarter were a result of our ongoing promotional successes and decision to hold prices steady despite higher food costs. During the quarter, we also continued to focus on increasing store penetration in existing markets and opened seven new stores in our core geographies, including Florida and North Carolina.”
Based on its first quarter results and the outlook for the remainder of the year, the company is affirming its fiscal 2014 forecast of adjusted earnings of $1.56 to $1.66 per diluted share. This forecast excludes anticipated pre-tax store closure and exit costs of approximately $0.27 per diluted share related to store closings in California and Texas to be recognized primarily during the first half of fiscal 2014. Diluted earnings per share are now expected to be $1.29 to $1.39, including the aforementioned store closure and exit costs of approximately $0.27 per diluted share. It expects a comparable-store sales increase in the range of 1.5% to 3.5%.