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Fresh Market Eyes Unit Growth

GREENSBORO, N.C. — The Fresh Market here said last week that it planned to add 14 to 16 new stores in fiscal 2012 and drive same-store sales growth of 4% to 6%, following a 7% jump in comparable-store store sales for the fourth quarter of 2011.

New-market entries the retailer plans in 2012 include Oklahoma, Kansas and New Hampshire, with California on the radar for either late 2012 or early 2013.

In a conference call discussing the results from the high-end specialty retailer’s first full year as a public company, Craig Carlock, chief executive officer, said the company has been “making significant personnel investments in our corporate and support functions at field operations and resources associated with our entry into California.”

“As we look to fiscal 2012, we are enthusiastic about our business and our growth prospects, and we expect 2012 to be another exceptional year for both revenue growth and profitability,” he said. He projected earnings-per-share growth of 18% to 22% for 2012.

The company opened six new stores in the fourth quarter of 2011, plus two new stores so far in 2012, bringing its total to 115 locations in 21 states.

Carlock said the banner’s relatively small size, and its willingness to repurpose existing facilities, help keep expansion costs in check. Capital expenditures for the year are expected to be $95 million to $105 million, up from about $87.5 million in 2011 but constant at about 8% of sales.

Net income in the fourth quarter of fiscal 2011 was $18.3 million, vs. a loss of $22.2 million in the year-ago period, which included one-time charges related to its initial public offering. Sales in the 13-week quarter, which ended Jan. 29, were up 16.3% to $320.8 million.

The 7% fourth-quarter comp included a 5.7% increase in traffic and a 1.3% increase in average ticket, “indicating to us that our customer is still confidently spending and looks to us for their important holiday food shopping purchases,” said Lisa K. Klinger, executive vice president and chief financial officer.

For the full year, net income of $51.4 million more than doubled the $21.3 million of 2010, which included the impact of the IPO-related charges. Excluding those charges, net income in fiscal 2011 increased 24.7% vs. prior-year levels. Sales for the year were up 13% to $1.11 billion, including a 5.4% gain in comparable-store sales for the year.

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