http://www.morningstar.com/earnings/52705993-fresh-market-inc-tfm-q1-2013.aspx

Fresh Market Inc TFM
Q1 2013 Earnings Call Transcript

Transcript Call Date 05/29/2013

Operator: Good day, ladies and gentlemen and welcome to The Fresh Market First Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session with instructions following at that time. As a reminder, this conference is being recorded.

Now, I'll turn the conference over to your host, Mr. Sean Crane, Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer. Please begin.

Sean Crane - EVP, COO and Interim CFO: Thank you, operator. I'd like to welcome everyone to The Fresh Market's first quarter 2013 earnings call. I am Sean Crane, Executive Vice President and Chief Operating Officer and Interim Chief Financial Officer. Joining me on today's call is The Fresh Market's President and Chief Executive Officer, Craig Carlock.

Before we begin the discussion of our business results, I want to remind you that any forward-looking statements we may make today are subject to our Safe Harbor statements found in our press release and SEC filings. Our first quarter earnings release and related financial information, including any non-GAAP or adjusted financial reconciliation tables are available on our corporate website under the Investor Relations section.

After our prepared comments, we will have time to answer your questions. Please note that a replay of this call will be available for 30 days on our website at www.thefreshmarket.com.

With that, let me turn the call over to Craig.

Craig Carlock - President and CEO: Thank you, Sean and good morning, everyone. We are pleased to report first quarter earnings per share of $0.46, which represents near 15% growth from last year. Our solid financial results get the year off to a good start and reinforce our confidence in our full-year outlook. I was glad to see our business and customer traffic improved on of the sequential quarter basis. Net sales grew a solid 13%, driven by new store openings and comparable store sales of 3%. Customer traffic this quarter rose 60 basis points from a year earlier, even as we lapped one of the best traffic quarter's in our Company's history. This progress provides another confirming data point that the slowdown we experienced late last year was essentially confined to the two-month period of November and December.

Even though our performance was solid this quarter, we do not take lightly the pullback that we experienced in Q4. We are a disciplined Company and committed to thoroughly understanding our business and growing our customer base. We continue to expand, invest in people, and lever systems to evaluate our performance and better understand our customers.

Based upon the increase in traffic count and comp sales we believe our customers are more confident than they were in the fourth quarter, so today we are updating our fiscal 2013 guidance to increase comparable store sales to a range of 2.5% to 4.5%.

Let me now turn the call over to Sean for a deeper discussion of some of the key drivers this quarter.

Sean Crane - EVP, COO and Interim CFO: Thank you, Craig. We are proud of the sales and profit results we achieved this quarter, especially as we lapped last year's strong comp performance and continue to execute well. In the first quarter, The Fresh Market's diluted earnings per share rose 14.6% to $0.46 from $0.40 in the prior year's quarter. We realized this earnings growth, despite incurring higher than normal employee healthcare claim cost, and a previously disclosed increase in shared-based compensation expense.

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