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Fairway loss mounts in Q2 as summer sales slow

Fairway Market said Thursday that sales improved by 5.9% to $194 million in the second quarter, but lower margins, declining comparable store sales and a slow summer sales season led to a $17.2 million loss. Fairway lost $12.2 million in the same period last year.

"We had a challenging July and August but improved our performance in September,” Fairway co-president Ed Arditte said in a statement.

Same store sales declined 3.9% in the quarter compared to the second quarter of fiscal 2014.

On a sequential basis, the decrease in the same store sales from negative 1.7% in the first quarter of fiscal 2015 to negative 3.9% in the second is primarily due to the full quarter impact of lost sales at Fairway’s Red Hook, Brooklyn location as a result of a competitive opening.

Gross margin declined approximately 180 basis points to 30.6% of sales from 32.4% in the prior year. Approximately 130 basis points of the gross margin decline was attributable to lower merchandise margins due to higher shrink, cost inflation in certain perishable departments, which for competitive reasons the company did not fully pass on to shoppers, targeted price reductions, and mix of sales.

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