The Fresh Market Q4 Profit Tops Estimate; To Close California Operations

(RTTNews) - Grocery retailer The Fresh Market, Inc. (TFM) reported net income for the fourth quarter of $20.2 million or $0.42 per share, compared to $2.0 million or $0.04 per share for the year-ago quarter.

Excluding items, adjusted net income for the fourth quarter was $26.6 million or $0.55 per share, compared to $18.8 million or $0.39 per share in the prior year quarter.

Net sales for the fourth quarter rose 12.8% to $480.49 million from $425.81 million a year ago, with same-store sales up 3.0%.

Analysts polled by Thomson Reuters expected the company to earn $0.51 per share on revenue of $482.91 million for the fourth quarter. Analysts' estimates typically exclude special items.

The Fresh Market also said that it has decided to close its operations in California, which include stores in Palo Alto, Santa Barbara and Laguna Hills, in order to focus on higher growth opportunities. The decision is consistent with the company's previously announced strategy to concentrate its unit growth resources in the eastern half of the United States over the next three years.

The stores will be closed to customers by March 31, and the company expects store closure activities to be completed in fiscal 2015.

As a result of the store closures, the company anticipates additional charges in fiscal 2015 of $20 million to $26 million related to the recognition of lease liabilities, asset disposals, severance and other costs associated with the closure of operations in California.

In the first quarter of fiscal 2015, winter storms forced the Company to temporarily close a significant number of stores. The company estimates the impact of the weather related events to be $0.01 to $0.02 per share.

For the fiscal year 2015, the company forecasts net sales growth of 9.0% to 11.0%, earnings of $1.52 to $1.67 per share and adjusted earnings of $1.77 to $1.85 per share. Analysts currently expect the company to earn $1.80 per share on revenue growth of 13.60% for the fiscal year 2015.