By Maria Armental
Fairway Group Holdings Inc. (FWM) said its fiscal fourth-quarter
loss narrowed as the grocery-store operator cut costs in key
areas.
"During the quarter we made progress on a number of operational
initiatives," interim Chief Executive William Sanford said. "Sales
and Adjusted EBITDA were in line with our expectations."
The niche supermarket chain, which traces its roots to a produce
stand founded in 1933 on New York's Upper West Side, had warned in
February sales for the period would be hurt as the Easter and
Passover holidays this year fell in the first quarter instead of
the fourth quarter. The company also announced a corporate shakeup
topped by the departure of chief executive Herb Ruetsch.
The New York chain said it is working with Google Express to
launch an online shopping platform that would offer same-day
delivery in Manhattan.
Fairway competes with such natural-foods-oriented retailers as
Whole Foods Market Inc. (WFM), Fresh Market Inc. (TFM) and Trader
Joe's.
For the fiscal period that ended March 30, Fairway reported a
loss of $8.8 million, or 21 cents a share, from a year-earlier loss
of $14.4 million, or $1.17 a share. Excluding severance,
compensation and other items, adjusted net loss narrowed 77% to
about $252,000.
Sales rose 12% to $200.3 million. In February, the company said
it expected a 10% increase in revenue from the year-ago period.
Analysts polled by Thomson Reuters recently expected a per-share
loss of nine cents on revenue of $199.2 million.
Same-store sales, a key metric that focuses on stores that are
open at least a year, fell 1.9%. That figure doesn't include the
company's Red Hook store, which had been excluded from last year's
calculations as it had been temporarily closed due to damage from
Hurricane Sandy.
Gross margin narrowed to 32.4% from 33.5%, which Fairway
attributed to higher occupancy costs.
Expenses jumped 14%, while store-opening costs dropped 52%.
Through Thursday's closing, Fairway's shares, up 4% in
recent-after hours trading to $6.90, were down 69% over the past 12
months. The stock debuted on the market at $13 a share in April
2013.
Write to Maria Armental at maria.armental@wsj.com
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