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What to Expect from The Fresh Market’s Fiscal 4Q16 Earnings

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Mar. 2 2016, Published 9:40 a.m. ET

Snapshot of this series

The Fresh Market (TFM) is scheduled to report its fiscal 4Q16 and fiscal 2016 earnings tomorrow. TFM had a tough year in fiscal 2016 and reported a continuous decline in its same-store sales during the first three quarters. Sales comps were down by 3.7% in 3Q16 and are predicted to stay between -2.6% and -2%, per the company’s guidance for fiscal 2016. EPS (earnings per share) for fiscal 2016 are predicted to be $1.55–$1.60 versus the consensus average earnings estimate of $1.57 (reflecting a 2% year-over-year decline).

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The Fresh Market faces stiff competition

Based in North Carolina, The Fresh Market operates as a specialty grocery retailer. As of October 25, 2015, the company operates 180 stores in 27 states across the United States. The company has witnessed a significant decline in its store traffic over the last couple of quarters as the larger grocery chains and mass merchandisers such as Kroger (KR) and Walmart (WMT) jumped on the organic food bandwagon. Sprouts Farmers Market’s (SFM) successful entry into the Southeast, TFM’s main territory, has also started to take a toll on the company’s performance.

ETF exposure

Investors looking for diversified exposure to The Fresh Market (TFM) can invest in the SPDR S&P Retail ETF (XRT), the Vanguard Consumer Staples ETF (VDC), or the Barron’s 400 ETF (BFOR). While XRT invests 1.1% of its holdings in TFM, BFOR and VDC invest 0.27% and 0.13% of their respective holdings in TFM.

What to look for in this series

In this series, we’ll look at The Fresh Market’s financial performance in the last reported quarter, fiscal 3Q16, and briefly discuss the company’s guidance for the next quarter and fiscal 2017. This series will also touch on the company’s ongoing strategic review, which is believed to have attracted bids from companies like Kroger (KR). We’ll close the series by looking at the company’s performance in the stock market and its valuation versus that of peers.

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