US retailer The Fresh Market has raised its forecast for full-year earnings, despite posting a  drop in third-quarter profits.

Net income for the three months to the end of October reached $9.2m, down 35.4% on the same period last year.

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However, the company said it was able to maintain its operating margin of 5.5%, despite pressure from rising food and commodity costs and despite the additional costs incurred related to being a publicly-traded company. 

Income from operations reached $14.5m, up from $13.1m last year.

Net sales for the period reached $263.3m, up 11.7% on last year. Comparable-store sales increased 5.5% compared to the same quarter last year. The Fresh Market said the increase was due to a 2% jump in the number of transactions, an increase in average transaction size, which was primarily driven by inflation along with modest growth in units per transaction.

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The Fresh Market president and CEO Craig Carlock said: “We continue to be very pleased with the momentum in our business.”

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The retailer raised its EPS guidance to a range of $1.04 to $1.07 per share from a range of $1.03 to $1.06 per share.

An analyst note from William Blair & Co said: “While third-quarter results initially appeared to be disappointing, we perceive that the timing of new store openings contributed to quarterly earnings volatility, and the overall fundamental growth outlook appears to be intact.”

For the nine months to the end of October, net income was down 31.5% to $33.1m. Income from operations reached $53.6m, up from $45.5m the same period last year. During the period, net sales grew 11.7% to $787.3m. Comparable-store sales increased 4.7%.