Why The Fresh Market Inc (TFM) Must Grow Faster

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The Fresh Market Inc (NASDAQ:TFM)On Wednesday, The Fresh Market Inc (NASDAQ:TFM) will release its latest quarterly results. As the company named to follow in the high-growth footsteps of Whole Foods Market, Inc. (NASDAQ:WFM), can The Fresh Market manage to live up to the expectations investors have of it?

Given the success of Whole Foods, it was inevitable that companies like The Fresh Market Inc (NASDAQ:TFM) would come along to try to replicate its success. So far, the growth path that The Fresh Market has followed has been impressive, but can it keep up the pace long enough to reach critical mass as a serious threat to its rival? Let’s take an early look at what’s been happening with The Fresh Market Inc (NASDAQ:TFM) over the past quarter and what we’re likely to see in its quarterly report.

Stats on The Fresh Market

Analyst EPS Estimate $0.44
Change From Year-Ago EPS 10%
Revenue Estimate $369.69 million
Change From Year-Ago Revenue 13.8%
Earnings Beats in Past 4 Quarters 2

Source: Yahoo! Finance.

Will The Fresh Market have healthy earnings this quarter?
Analysts have reined in their expectations of The Fresh Market Inc (NASDAQ:TFM)’s earnings lately, cutting a nickel per share from their April-quarter projections and cutting more than twice that from their full-year consensus for the current year. The stock has also languished, falling about 5% since late February.

The key reason for The Fresh Market’s challenges lately was its last quarterly report back in March. In that report, the grocery retailer said same-store sales rose only 1.9%, less than half what analysts had expected. Moreover, the company guided down estimates for the full year, with most of its planned new-store growth coming in the second half of 2013. As Whole Foods has also been moving aggressively to boost its store count, investors worry that The Fresh Market Inc (NASDAQ:TFM) could be hitting a point of diminishing returns within the high-end grocery industry.

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