While many grocers were negatively affected by Kroger’s earnings report yesterday, The Fresh Market came alive after reports that Steven Cohen and SAC Capital increased ownership in TFM stock to 2.4 million shares or 5.1%.
The stock rose 3.3% yesterday on the news, giving a much-needed lift to the struggling specialty grocery retailer. After The Fresh Market reported disappointing third-quarter earnings on Nov. 22, investors punished the stock by nearly 19%.
Like many in the grocery market, it is stuck in a world with low profit margins and stiff competition. Headquartered in Greensboro, N.C., it operates 149 stores in 26 states. However, The Fresh Market will be opening 22 new stores by year-end. Each store will cost $3 million to $5 million and is expected to generate $8 million to $10 million each for 2014.
While this raises TFM’s debt, time will tell if the additional stores can add enough income to beef up earnings. At least Cohen seems confident they will.