Fairway Posts Q1 Loss
Fairway Group Holdings Corp., the parent company of New York-based Fairway Market, reported a first-quarter loss of $27.9 million, or $2.11 per share, compared with a $3.9 million loss for the year-ago period, or 86 cents per share. The loss is attributed to the grocer’s recent IPO, with the adjusted net loss amounting to $3.8 million.
For the quarter ended June 30, net sales rose 21 percent year-over-year to $187.8 million, from $154.68 million. Same-store sales in the quarter increased 1.4 percent over last year, with customer transactions rising 0.8 percent and basket size improving 0.5 percent.
Additionally, adjusted EBITDA increased 12 percent to $12.7 million, while gross margin widened to 32.9 percent from 32.8 percent.
“We are pleased to report strong operating results for the quarter, our first as a public company," said Charles Santoro, Fairway's executive chairman. "Fairway remains on track with our long-term strategy designed to expand our store count and increase our margins. We remain confident in our ability to execute these plans."
"We executed well this quarter with improved gross margin performance and good control of our operating expenses despite the added costs associated with being a public company,” added CEO Herb Ruetsch. “We feel good about our ability to continue to enhance gross margins and leverage our Central Services expenses over the full fiscal year.”
On April 22, 2013, Fairway completed its IPO of approximately 15.7 million shares of common stock, including 2.3 million shares sold by existing stockholders.
In other Fairway news, the company said it reached a deal to fill the retail space in the first office tower being constructed at the Hudson Rail Yards, a 52-story, 895-foot tall spire on the corner of West 30th Street and 10th Avenue in Manhattan. Fairway will take 46,000 square feet in the property as the anchor tenant and plans to open in 2015 in the space located in the heart of the neighborhood west of Penn Station that's poised to see the city's greatest explosion of new development, according to Crain's New York.
A partnership between the Related Cos. and Oxford Properties Group plans to build $15 billion of office, residential, retail and public space on a platform over the roughly 30-acre train yards. Meanwhile, a host of other developers are at work on or are planning to put up millions of square feet of residential and commercial space in the vicinity.
"This is a visionary deal for Fairway," Patrick Smith, a retail broker at SRS Real Estate Partners, told Crain's New York. "There isn't enough there today to support a big store like that but it's one of those markets that has all the components and you can see where it's going."