NEW YORK (TheStreet) -- Supermarket chain Fairway Group Holdings (FWM) was crumbling on Friday after posting a big miss on third-quarter earnings and as CEO Herbert Ruetsch announced his retirement.
By market close, shares had plummeted 29% to $8.12.
In the three months to Dec. 29, the New York-based business reported a net loss of 74 cents a share, a 70-cent deeper loss than analysts surveyed by Thomson Reuters expected. However, profitability had improved upon the year-ago quarter's loss of $4.20 a share.
Revenue increased 23% to $205.7 million, $2 million short of consensus.
"While our business faced a number of headwinds during the quarter including a tougher comparison over last year, the compressed holiday shopping season and a generally softer retail backdrop, we remain excited about our long-term growth prospects," said chairman Charles Santoro in a statement.
Same-store sales decreased 1.7%, excluding Brooklyn-based Red Hook which was closed for three-quarters of the quarter the prior year due to Hurricane Sandy damage. The fall in sales was due to a compressed holiday shopping period and the beneficial impact of Sandy in the year earlier due to a pre- and post-storm stock-up.
The company has initiated efforts to restructure to remove redundancy and efficiently streamline parts of the business model to enhance productivity. Annualized cost savings of around $3 million to $4 million are expected as a result. Over the next year, the company expects to incur charges of around $7 million resulting from restructuring, primarily severance payouts.
Fairway also announced CEO Ruetsch will step down after 15 years at the company, but intends to remain as a special adviser. Ruetsch has held the role of CEO for two years.
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