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Investors abandon Fairway after Q2 loss widens

Stock in Fairway Group Holdings was down by nearly 10% Friday, after the retailer reported a wider than expected quarterly loss and suspended financial guidance as a rebuilding commences under new CEO Jack Murphy.

Jon Springer, Executive Editor

November 7, 2014

2 Min Read
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Stock in Fairway Group Holdings was down by nearly 10% Friday, after the retailer reported a wider than expected quarterly loss and suspended financial guidance as a rebuilding commences under new CEO Jack Murphy.

Murphy, who was appointed to his role in September, in his first remarks to the financial community late Thursday said it was too early on to remark on specific strategies but intended to craft “very detailed marketing and merchandising plans” focused on improving same-store sales and enhancing processes for the New York-based specialty retailer. “There's a lot of work to do here at Fairway, but there's also a tremendous amount of opportunity,” Murphy said. He did not take questions from analysts.

As reported previously, Fairway’s sales in the second quarter improved by 5.9%, but comps were down by 3.9% as a result of new competition — in particular a Brooklyn Whole Foods store affecting sales at Fairway’s Red Hook store — and losses mounted to $17.2 million as a result of price investments, inflation that was not passed along to shoppers, and increased shrink. Earnings and revenue were below analyst predictions.

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Ed Arditte, co-president and CFO, said, “We're actively reviewing all operational activities in the company and we believe that halting guidance is the appropriate action for us at this point.”

Fairway stock closed Friday at $2.46 per share, down by 9.56%, its lowest close since it began trading in April 2013.

 

About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

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