The Fresh Market (TFM) Stock Closes Up Ahead of Earnings Results

The Fresh Market (TFM) will release its latest financial report after the market close on Thursday afternoon.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- Shares of The Fresh Market (TFM) finished the day in the green, having traded higher by 0.74% to $25.84 at the close on Wednesday, one day before the release of the company's 2015 third quarter earnings results.

The company will release its latest financial report after the market close on Thursday afternoon. 

Analysts are expecting the specialty grocery retailer to post a year over year decline in earnings per share but a rise in revenue for the most recent quarter.

The Fresh Market has been forecast to report earnings of 22 cents per share on revenue of $436.24 million for the three month period ended in October.

The company's adjusted earnings came in at 27 cents per diluted share on net sales of $419.5 million for the 2014 third quarter.

The Fresh Market is a Greensboro, NC-based grocery chain offering food products with a focus on perishables including seafood, meat, produce, deli and bakery.

Separately, TheStreet Ratings team rates FRESH MARKET INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate FRESH MARKET INC (TFM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TFM's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 4.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FRESH MARKET INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FRESH MARKET INC increased its bottom line by earning $1.31 versus $1.05 in the prior year. This year, the market expects an improvement in earnings ($1.60 versus $1.31).
  • TFM's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
  • The gross profit margin for FRESH MARKET INC is currently lower than what is desirable, coming in at 33.70%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 3.95% is above that of the industry average.
  • TFM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 36.74%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, TFM is still more expensive than most of the other companies in its industry.
  • You can view the full analysis from the report here: TFM

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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