Fresh Market Profit Rises; But Stock Down On Pruned Outlook - Update

(RTTNews) - Grocery retailer Fresh Market Inc. (TFM), Wednesday reported a higher second-quarter profit, helped mostly by an increase in sales and gross margins. Earnings for the quarter were in line with Wall Street estimates, but sales fell short of expectations.

Moving forward, the company cut its earnings outlook for fiscal year 2013 and anticipates to incur incremental new-store-opening costs.

Shares of the company dropped 3.5 percent in after-hours trade on the Nasdaq.

The Greensboro, North Carolina-based company posted quarterly net income of $15.6 million or $0.32 per share, compared with $13 million or $0.28 per share last year.

On average, 15 analysts polled by Thomson Reuters expected earnings of $0.32 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter climbed over 13 percent to $354.8 million from $313 million a year ago, but missed analysts' expectations of $356.8 million.

On a same-store basis, sales were up 3.4 percent.

"Comparable store sales continued to improve from prior quarters and gross margin expanded, even in the face of rising product cost inflation," said CEO Craig Carlock.

For fiscal year 2013, the company now expects earnings of $1.50 to $1.55 per share, down from prior range of $1.51 to $1.58 per share. Analysts currently expect earnings of $1.59 per share.

As of July 2013, the company operated 136 stores and is on track to open about 22 stores in the year.

The company's stock closed Wednesday at $54.28, down $0.05 or 0.09%, on a volume of 665 thousand shares. In the after hours, the stock dropped $1.88 or 3.46%.