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November 11, 2013

US: Retailer Fairway misses Wall St forecasts

Shares in regional US retailer Fairway Group Holdings tumbled after the company posted sales and earnings that fell short of Wall Street expectations.

By Dean Best

Shares in regional US retailer Fairway Group Holdings tumbled after the company posted sales and earnings that fell short of Wall Street expectations.

The NASDAQ-listed group, which floated in April, saw sales grow in the second quarter of its financial year, increasing 14.1% to US$183.2m for the quarter to 29 September.

However, the consensus estimate among analysts was for sales to hit $187.3m. Fairway, based in New York, booked a net loss of $12.2m, or $0.30 a share. Analysts had forecast a loss of $0.07 a share.

Same-store sales during the quarter were up 1%. Fairway said calendar effects had had an impact on sales. It cited the holiday overlap of Labor Day and Rosh Hashanah as well as a one-week delay in school openings this year.

However, executive chairman Charles Santoro added: “Our business continued to perform well in the quarter, which was highlighted by same-store sales growth, gross margin expansion, 10% store contribution growth, increased private label penetration and the continued development of our central production center and new store pipeline.”

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