The Fresh Market, Inc. (TFM) Misses Q4 EPS by 3c, EPS Guidance Falls Short
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The Fresh Market, Inc. (NASDAQ: TFM) reported Q4 EPS of $0.39, $0.03 worse than the analyst estimate of $0.42. Revenue for the quarter came in at $425.8 million versus the consensus estimate of $428.6 million.
Comparable store sales increased 3.1% The fourth quarter comparable store sales increase was due to a 1.6% increase in average transaction size and a 1.5% increase in transaction volume. Though winter storms created volatility in transaction volume throughout the quarter, promotional activity drove average transaction size and incremental customer traffic.
The Fresh Market, Inc. sees FY2014 EPS of $1.56-$1.66, versus the consensus of $1.67.
The Fresh Market, Inc. sees Q1 2014 EPS of $0.41-$0.44, versus the consensus of $0.50.
Fiscal 2014 Outlook
In addressing guidance, Carlock commented, “As we begin the new fiscal year, I am encouraged by the many initiatives we have implemented to improve promotional execution, real estate selection and new store performance. The Fresh Market will open a record number of new stores in fiscal 2014 and we remain confident that our fresh food offering, great customer service and warm, inviting environment is a concept that consumers will continue to embrace as we grow our store base.” Carlock added, “We anticipate that earnings growth will be weighted toward the second half of the fiscal year, as recently opened stores achieve their sales run rate and we cycle costs associated with new store development and openings in the first half of fiscal 2014.”
In the first quarter of fiscal 2014, winter storms forced the Company to temporarily close a significant number of stores. The Company estimates the impact of these weather related events to be approximately $0.01 per diluted share. The Company also expects to recognize pre-tax charges of $18.0 million to $20.0 million, or $0.23 to $0.26 per diluted share, related to the recognition of lease liabilities, severance and other costs associated with closure of four stores. These charges will be recognized during the first and second quarter of fiscal 2014, although the portion of these charges to be recognized in each quarter has not been determined at this time. Excluding the impact of the store closure charges that are recognized during the first quarter, the Company expects adjusted earnings for the first quarter of $0.41 to $0.44 per diluted share.
For fiscal 2014, the Company expects diluted earnings per share of $1.30 to $1.43 and adjusted earnings of $1.56 to $1.66 per diluted share, which excludes anticipated pre-tax charges between $18.0 million and $20.0 million during the first and second quarters related to the recognition of lease liabilities, severance and other costs associated with store closures. Management’s outlook for fiscal 2014 is based upon the following:
Opening 23 to 25 new stores, with seven new stores opening in the first quarter; five to six new stores opening in the second quarter; and 10 to 12 new stores opening in the second half of the year. New stores will be concentrated in the Company’s core geographies, while only seven to eight will open in newer markets, four to five of which are planned for California and Texas
Comparable store sales growth of 1.5% to 3.5%
Pre-Opening expenses in line with fiscal 2013
Occupancy costs as a percent of sales to increase approximately 30 basis points from fiscal 2013
Remodeling five to eight stores and no relocations
Approximately $125 million to $145 million in capital expenditures, primarily related to real estate investments
An effective tax rate of 37.5%
Year-on-year improvement in operating results associated with stores operating in California and Texas beginning in the second half of the fiscal year after the closure of three stores in Sacramento, California and one in Houston, Texas.
For earnings history and earnings-related data on The Fresh Market, Inc. (TFM) click here.
Comparable store sales increased 3.1% The fourth quarter comparable store sales increase was due to a 1.6% increase in average transaction size and a 1.5% increase in transaction volume. Though winter storms created volatility in transaction volume throughout the quarter, promotional activity drove average transaction size and incremental customer traffic.
The Fresh Market, Inc. sees FY2014 EPS of $1.56-$1.66, versus the consensus of $1.67.
The Fresh Market, Inc. sees Q1 2014 EPS of $0.41-$0.44, versus the consensus of $0.50.
Fiscal 2014 Outlook
In addressing guidance, Carlock commented, “As we begin the new fiscal year, I am encouraged by the many initiatives we have implemented to improve promotional execution, real estate selection and new store performance. The Fresh Market will open a record number of new stores in fiscal 2014 and we remain confident that our fresh food offering, great customer service and warm, inviting environment is a concept that consumers will continue to embrace as we grow our store base.” Carlock added, “We anticipate that earnings growth will be weighted toward the second half of the fiscal year, as recently opened stores achieve their sales run rate and we cycle costs associated with new store development and openings in the first half of fiscal 2014.”
In the first quarter of fiscal 2014, winter storms forced the Company to temporarily close a significant number of stores. The Company estimates the impact of these weather related events to be approximately $0.01 per diluted share. The Company also expects to recognize pre-tax charges of $18.0 million to $20.0 million, or $0.23 to $0.26 per diluted share, related to the recognition of lease liabilities, severance and other costs associated with closure of four stores. These charges will be recognized during the first and second quarter of fiscal 2014, although the portion of these charges to be recognized in each quarter has not been determined at this time. Excluding the impact of the store closure charges that are recognized during the first quarter, the Company expects adjusted earnings for the first quarter of $0.41 to $0.44 per diluted share.
For fiscal 2014, the Company expects diluted earnings per share of $1.30 to $1.43 and adjusted earnings of $1.56 to $1.66 per diluted share, which excludes anticipated pre-tax charges between $18.0 million and $20.0 million during the first and second quarters related to the recognition of lease liabilities, severance and other costs associated with store closures. Management’s outlook for fiscal 2014 is based upon the following:
Opening 23 to 25 new stores, with seven new stores opening in the first quarter; five to six new stores opening in the second quarter; and 10 to 12 new stores opening in the second half of the year. New stores will be concentrated in the Company’s core geographies, while only seven to eight will open in newer markets, four to five of which are planned for California and Texas
Comparable store sales growth of 1.5% to 3.5%
Pre-Opening expenses in line with fiscal 2013
Occupancy costs as a percent of sales to increase approximately 30 basis points from fiscal 2013
Remodeling five to eight stores and no relocations
Approximately $125 million to $145 million in capital expenditures, primarily related to real estate investments
An effective tax rate of 37.5%
Year-on-year improvement in operating results associated with stores operating in California and Texas beginning in the second half of the fiscal year after the closure of three stores in Sacramento, California and one in Houston, Texas.
For earnings history and earnings-related data on The Fresh Market, Inc. (TFM) click here.
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