The Fresh Market, Inc. Reports Third Quarter and Year to Date Fiscal 2012 Earnings

The Fresh Market, Inc. Reports Third Quarter and Year to Date Fiscal 2012
Earnings

  - Total sales increased 22.1% for the third quarter and 21.8% year to date

 - Diluted earnings per share increased 18.5% for the third quarter and 30.8%
                                 year to date

            - Company reaffirms earnings guidance for fiscal 2012

GREENSBORO, N.C., Nov. 28, 2012 (GLOBE NEWSWIRE) -- The Fresh Market, Inc.
(Nasdaq:TFM), a high-growth specialty retailer, today announced unaudited
sales and earnings results for its third quarter and fiscal year to date
period ended October 28, 2012.

Financial Overview

In the third quarter of fiscal 2012, net sales increased 22.1% to $321.5
million and comparable store sales increased 5.6%, compared to the
corresponding thirteen week period last year. Net income in the third quarter
of fiscal 2012 increased 19.0% to $10.9 million, from $9.2 million in the
corresponding thirteen week period in fiscal 2011. Diluted earnings per share
in the third quarter of fiscal 2012 was $0.23, an increase of 18.5% over
diluted earnings per share of $0.19 for the corresponding period in fiscal
2011.

Year to date fiscal 2012 net sales were $959.3 million, a 21.8% increase as
compared to the corresponding thirty-nine week period in fiscal 2011, while
comparable store sales increased 7.3%. Net income increased 31.2% to $43.5
million as compared to $33.1 million in the corresponding thirty-nine week
period in fiscal 2011. Year to date diluted earnings per share for fiscal 2012
increased 30.8%, to $0.90, compared to diluted earnings per share of $0.69 for
the corresponding thirty-nine week period in fiscal 2011. Items described
below under "Items Impacting Comparability" impact the comparability of year
to date results and should be reviewed by investors in order to assess the
Company's ongoing operations on a comparable basis.

"We are pleased that our strong sales and earnings growth continued in the
third quarter," said Craig Carlock, President and Chief Executive Officer.
"Our comparable store sales grew 5.6%, and importantly, customer transactions
grew nicely even as we cycled on solid transaction growth during last year's
third quarter. Additionally, during the quarter, we opened six new stores,
including our first California store. Subsequent to quarter-end, we entered
into four leases for new stores in Houston, Texas that we expect to open in
the latter half of fiscal 2013. Our store openings in Houston will mark our
entrance into Texas, just as our store opening this quarter in the Sacramento
area marked our entrance into California. We'll be excited to have operations
in the two most populous states in the nation. Net, we remain enthusiastic
about the consistency of our business, the portability of our concept, and the
franchise we are building in the real estate marketplace. At this time, we
affirm our fiscal 2012 earnings guidance. We anticipate that fiscal 2012
comparable store sales growth will be 5.5% to 6.5% and that our earnings per
share will be $1.33 to $1.38, an increase of approximately 25% to 29% over
fiscal 2011. These earnings growth rates include the absorption of equity
offering transaction expenses and incremental legal costs incurred during the
fiscal year."

Items Impacting Comparability

During the second quarter of fiscal 2012, the Company completed a public
offering of common stock impacting the comparability of year to date fiscal
2012 results to the corresponding results in fiscal 2011. Transaction expenses
related to the offering, which in general are not tax deductible, are included
in selling, general and administrative expense and totaled approximately $0.5
million, resulting in a reduction in diluted earnings per share of
approximately $0.01 per share on a year to date basis. The costs associated
with the offering include legal, printing, accounting and filing fees and
expenses as well as other charges directly related to the offering.
Additionally, the Company completed a public offering of common stock during
the first quarter of fiscal 2011 and incurred approximately $1.1 million in
transaction expenses, which resulted in a reduction in earnings per share of
approximately $0.02 per share on a diluted basis and impacts year-to-date
comparability.

The Company also resolved two legal matters during the second quarter of
fiscal 2012. The net amount of the settlement payments made and received
related to these matters is included in selling, general and administrative
expense and totaled approximately $0.4 million on a pre-tax basis, which
includes an additional final payment of $0.2 million received during the third
quarter, resulting in a reduction in diluted earnings per share of
approximately $0.01 per share on a year to date basis. Legal fees and related
expenses incurred in connection with these matters have been expensed as
incurred.

Operating Performance

The Company had strong sales and earnings growth and continued to improve its
operating margin in the third quarter of fiscal 2012. Total net sales
increased 22.1% to $321.5 million in the third quarter of fiscal 2012, and
comparable store sales increased 5.6% to $266.7 million, in each case compared
to the corresponding thirteen week period in fiscal 2011. The third quarter
comparable store sales increase resulted from a 3.3% increase in the number of
transactions and a 2.3% increase in average transaction size. For the year to
date fiscal 2012 period, total net sales increased 21.8% to $959.3 million and
comparable store sales increased 7.3% to $821.2 million, compared to the
corresponding thirty-nine week period in fiscal 2011. The year to date fiscal
2012 comparable store sales increase resulted from a 4.8% increase in the
number of transactions and a 2.5% increase in average transaction size.

The Company's gross profit increased 26.3%, or $22.2 million, to $106.4
million in the third quarter of fiscal 2012, compared to the corresponding
thirteen week period of fiscal 2011. For the same period, the gross margin
rate increased 110 basis points to 33.1% compared to the corresponding prior
year period. This increase in the Company's gross margin rate was attributable
to an increase in our merchandise margin rate, primarily as a result of
improved supply chain expense and a reduction in shrink expense, and occupancy
leverage achieved as the Company incurred less deferred rent expense versus
last year. For the year to date fiscal 2012 period, the Company's gross profit
increased 25.9%, or $67.1 million, to $325.8 million, compared to the
corresponding thirty-nine week period of the prior year. For the same period,
the gross margin rate increased 110 basis points to 34.0%, compared to the
prior year period. The change in the Company's gross margin rate for the year
to date fiscal 2012 period was mostly attributable to increased merchandise
margin, as well as leverage in occupancy cost. For the third quarter and year
to date periods, estimated LIFO expense was approximately $0.5 million less in
fiscal 2012, compared to the corresponding periods in fiscal 2011,
contributing slightly to the increased gross margin rate.

Selling, general, and administrative expenses for the third quarter of fiscal
2012 increased $16.3 million to $76.6 million as compared to the corresponding
thirteen week period in fiscal 2011. Selling, general, and administrative
expenses increased by 90 basis points as a percentage of sales to 23.8% for
the period as compared to 22.9% for the corresponding thirteen week period in
fiscal 2011. This increase in the selling, general and administrative expense
rate was primarily attributable to increased store compensation and
pre-opening expenses, both as a result of more new stores opening in the third
quarter of this year versus last year, as well as higher corporate expenses,
driven by approximately $0.8 million of incremental expenses mostly
attributable to the Company's share-based compensation programs. Also, the
increase in corporate expenses was partially attributable to our investment in
personnel and expenses associated with their hiring to support our growth.For
the year to date fiscal 2012 period, selling, general, and administrative
expenses increased $43.0 million to $221.1 million, or 23.0% as a percentage
of sales, from $178.1 million, or 22.6% as a percentage of sales, for the
comparable thirty-nine week period in fiscal 2011. These expenses included
higher corporate expenses, driven by approximately $2.1 million of incremental
expenses mostly attributable to the Company's share-based compensation
programs, as well as approximately $0.4 million related to legal settlements,
which together adversely impacted selling, general and administrative expenses
as a percentage of sales by approximately 20 basis points during the year to
date fiscal 2012 period, as compared to the corresponding thirty-nine week
period for fiscal 2011. Higher store pre-opening and store compensation
expenses also contributed to the increase as they both grew faster than sales.
In addition to these higher corporate expenses, the Company also had
transaction costs associated with the Company's public offering of common
stock in the second quarter of fiscal 2012 totaling approximately $0.5
million, compared to approximately $1.1 million of transaction costs incurred
in connection with the Company's public offering of common stock in the first
quarter of fiscal 2011.

Operating income increased $3.4 million to $17.9 million for the third quarter
of fiscal 2012, compared to $14.5 million for the corresponding thirteen week
period of fiscal 2011. Operating income as a percentage of sales for the third
quarter of fiscal 2012 increased by 10 basis points to 5.6%, compared to 5.5%
for the corresponding period of fiscal 2011, which includes approximately a 20
basis point negative impact of incremental expenses primarily related to
share-based compensation expense. For the year to date fiscal 2012, operating
income increased $17.1 million to $70.7 million, compared to $53.6 million in
the corresponding thirty-nine week period for fiscal 2011. As a percentage of
sales, our operating margin increased by 60 basis points to 7.4% for the year
to date fiscal 2012 period, compared to an operating margin of 6.8% for the
corresponding period in fiscal 2011. The primary drivers of the increase in
operating margin for the year to date fiscal 2012 period were the increase in
gross margin rate and a year-over-year decrease of transaction expenses
incurred in connection with our public offerings of common stock, off-set by
additional new store pre-opening expenses, higher corporate expenses and
depreciation.

Balance Sheet/Cash Flow

During the third quarter of fiscal 2012, the Company generated $23.5 million
in cash flow from operations and invested $20.9 million in capital
expenditures, of which $17.9 million related to new, relocated and remodeled
stores. For the year to date fiscal 2012 period, the Company generated $76.4
million in cash flow from operations and invested $62.8 million in capital
expenditures, with $55.5 million spent on real estate activities.

The Company's cash balance as of October 28, 2012 was approximately $15.3
million, an increase of $4.6 million compared to the cash balance at January
29, 2012. Total debt as of October 28, 2012 was $46.9 million, down $17.1
million from a balance of $64.0 million as of January 29, 2012.

Average inventory on a FIFO basis per store at the end of the third quarter of
fiscal 2012 increased 3.1%, compared to the corresponding period in fiscal
2011. The increase resulted from commodity cost increases in certain
departments such as Meat and Produce and increased inventory investments in
new product assortments and faster growing categories to support our overall
sales growth.

On a trailing four quarter basis for the period ended October 28, 2012, the
Company's return on assets was 18.5%, after-tax return on invested capital,
excluding excess cash, was 26.3%, and return on equity was 35.3%. These
financial return measures are non-GAAP financial measures. The schedules
attached to this press release include a discussion of these non-GAAP
measures, as well as the details of our calculations of these financial return
measures.

Growth and Development

During the third quarter of fiscal 2012, the Company opened six new stores in
Miami (Pinecrest), Florida; Bradenton, Florida; West Chester, Ohio; Richmond
(Carytown), Virginia; Athens, Georgia and Roseville, California, our first
store in the state of California. As of October 28, 2012, the Company operated
127 stores in 25 states.

The Company announced the signing of leases for eight additional new stores
in: Delray Beach, Florida; Fishers, Indiana; Lincolnshire, Illinois; Laguna
Hills, California; and 4 sites in the Houston, Texas market, through November
28, 2012. These eight stores are currently scheduled to open after fiscal
2012.

The following table provides additional information about the Company's real
estate and store opening activities through the third quarter of fiscal 2012
and leases announced as signed as of November 28, 2012 for stores scheduled to
open during or after fiscal 2012.

Store Information for Stores Opened in  Opened As of     Current Leases Signed
FY 2012                                 October 28, 2012 for Future Stores ^1
Number of new leased stores             12               16
Number of relocations                   —                1
Number of ground leases and owned       2                2
properties
Average capital cost per store ^2       $3.8 million     
Store Information for All Open Stores                   
Average store size (gross square feet)  21,082           
Total rentable square footage (at end   2.7 million      
of period)

Note 1: The Company may also be party from time to time to other leases and
real estate transaction documents that it has not yet announced. The Company's
website sets forth the most current list of announced leases and stores that
are coming soon.

Note 2: Net of capital contributions, if any, received from landlords, and
including building costs but excluding cost of land for owned stores.

Fiscal 2012 Outlook

For fiscal 2012, management now expects the Company to:

  *Open 16 new stores
  *Relocate one store
  *Spend approximately $90 million to $100 million in capital expenditures,
    primarily related to real estate investments
  *Increase comparable store sales 5.5% to 6.5%
  *Increase operating margin, as a percentage of sales, by 30 to 50 basis
    points, including the impact of the Company's equity offering costs and
    legal settlements
  *Generate diluted earnings per share of $1.33 to $1.38

2012 Third Quarter Earnings Conference Call

The Company will hold a conference call today at 9:00 a.m. Eastern Time hosted
by President and Chief Executive Officer, Craig Carlock and Executive Vice
President and Chief Financial Officer, Lisa Klinger. During the conference
call, the Company may answer questions concerning business and financial
developments and trends and other business and financial matters.The
Company's responses to these questions, as well as other matters discussed
during the conference call, may contain or constitute information that has not
been previously disclosed.

Those who wish to participate in the call may do so by dialing (877)
852-2928.Any interested party will also have the opportunity to access the
call via the Internet at www.thefreshmarket.com/company.To listen to the live
call via our website, please go to the website at least fifteen minutes early
to register and download any necessary audio software.For those who cannot
listen to the live broadcast, a recording will be available for 30 days after
the date of the event.Recordings may be accessed at
www.thefreshmarket.com/company.

About The Fresh Market, Inc.

Founded in 1982, The Fresh Market, Inc. is a specialty grocery retailer
focused on providing high-quality products in a unique and inviting atmosphere
with a high level of customer service. As of November 28, 2012, the Company
operates 128 stores in 25 states, located in the Southeast, Midwest,
Mid-Atlantic, Northeast and West. For more information, please visit
www.thefreshmarket.com.

Forward Looking Statements:This document contains forward-looking statements
that reflect our plans, estimates, and beliefs and involve a number of risks
and uncertainties. Any statements contained herein (including, but not limited
to, statements to the effect that The Fresh Market or its management
"anticipates," "plans," "estimates," "expects," "believes," and other similar
expressions) that are not statements of historical fact should be considered
forward-looking statements.The following are some of the factors that could
cause actual results to differ materially from any forward-looking statements:
accounting entries and adjustments at the close of our fiscal quarter and
fiscal year; unexpected expenses and risks associated with our business; our
ability to remain competitive in the areas of merchandise quality, price,
breadth of selection, customer service and convenience; the effective
management of our merchandise buying and inventory levels; the quality and
safety of food products and other items that we may sell; our ability to
anticipate and/or react to changes in customer demand; changes in consumer
confidence and spending; unexpected consumer responses to promotional
programs; unusual, unpredictable and/or severe weather conditions including
their effect on our supply chain and our store operations; the effectiveness
of our logistics and supply chain model, including the ability of our
third-party logistics providers to meet our product demands and restocking
needs on a cost competitive basis; the execution and management of our store
growth, including the availability and cost of acceptable real estate
locations for new store openings, the capital that we utilize in connection
with new store development and the time between lease execution and store
opening; the mix of our new store openings as between build to suit sites and
second-generation, as-is sites; the actions of thirdparties involved in our
store growth activities, including property owners, landlords, property
managers, contractors, subcontractors, government agencies and current tenants
who occupy one or more of our proposed new store locations, all of whom may be
impacted by their financial condition, their lenders, their activities outside
of those focused on our new store growth and other tenants, customers and
business partners of theirs; global economies and credit and financial
markets; our ability to maintain the security of electronic and other
confidential information; serious disruptions and catastrophic events;
competition; personnel recruitment and retention; acquisitions and
divestitures including the ability to integrate successfully any such
acquisitions; information systems and technology; commodity, energy, fuel, and
other cost increases; compliance with laws, regulations and orders; changes in
laws and regulations; outcomes of litigation and proceedings and the
availability of insurance, indemnification and other third-party coverage of
any losses suffered in connection therewith; tax mattersand other factors as
set forth from time to time in our Securities and Exchange Commission
filings.We intend these forward-looking statements to speak only as of the
time of this release and do not undertake to update or revise them as more
information becomes available.

This press release, and access to our earnings call, is also available in the
Investor Relations portion of The Fresh Market, Inc. website
(http://ir.thefreshmarket.com/)


The Fresh Market, Inc.
                                                              
Consolidated Statements of Comprehensive Income
(In thousands, except share and per share amounts)
(unaudited)
                                                              
                                                              
                       For the Thirteen Weeks Ended For the Thirty-Nine Weeks
                                                     Ended
                       October 28,    October 30,   October 28,  October 30,
                       2012           2011          2012         2011
                                                              
Sales                   $321,494     $263,260    $959,275   $787,263
Cost of goods sold     215,137       179,066      633,485     528,530
Gross profit            106,357       84,194       325,790     258,733
                                                              
Operating expenses:                                            
Selling, general and    76,590        60,281       221,087     178,086
administrative expenses
Store closure and exit  131           99           856         338
costs
Depreciation            11,749        9,309        33,164      26,681
Income from operations  17,887        14,505       70,683      53,628
Interest expense        526           481          1,109       1,450
Income before provision 17,361        14,024       69,574      52,178
for income taxes
Tax provision         6,472         4,874        26,086      19,041
                                                              
Net income             $10,889      $9,150      $43,488    $33,137
                                                              
Net income per share:                                          
Basic and diluted       $0.23        $0.19       $0.90      $0.69
                                                              
Weighted average common                                        
shares outstanding:
Basic                   48,068,869    47,996,697   48,057,451  47,993,688
                                                              
Diluted                 48,323,150    48,127,549   48,280,923  48,124,656
                                                              
Comprehensive income                                           
Net income              $10,889      $9,150      $43,488    $33,137
Interest rate swaps,
net of tax expense of
$0 and $120 for the
thirteen and            --           178          --         366
thirty-nine weeks ended
October 30, 2011,
respectively.
                                                              
Total comprehensive     $10,889      $9,328      $43,488    $33,503
income



The Fresh Market, Inc.
                                                                 
Consolidated Balance Sheets
(In thousands, except share amounts)
(unaudited)
                                                                 
                                                      October 28, January 29,
                                                      2012        2012
                                                                 
Assets                                                            
Current assets:                                                   
Cash and cash equivalents                              $15,318   $10,681
Accounts receivable, net                               6,493      4,550
Inventories                                            47,731     37,796
Prepaid expenses and other current assets              3,038      5,595
Deferred income taxes                                  3,458      4,445
                                                                 
Total current assets                                   76,038     63,067
                                                                 
Property and equipment:                                           
Land                                                   2,846      5,451
Buildings                                              19,016     15,077
Store fixtures and equipment                           268,658    237,678
Leasehold improvements                                 166,120    141,391
Office furniture, fixtures, and equipment              10,487     10,175
Automobiles                                            1,333      1,211
Construction in progress                               12,924     14,347
                                                                 
Total property and equipment                           481,384    425,330
Accumulated depreciation                               (198,356)  (168,518)
                                                                 
Total property and equipment, net                      283,028    256,812
Other assets                                           7,162      3,461
                                                                 
Total assets                                           $366,228  $323,340
                                                                 
Liabilities and stockholders' equity                              
Current liabilities:                                              
Accounts payable                                       $42,529   $34,788
Accrued liabilities                                    46,051     46,354
                                                                 
Total current liabilities                              88,580     81,142
                                                                 
Long-term debt                                         46,900     64,000
Deferred income taxes                                  25,818     31,053
Deferred rent                                          11,308     10,007
Other long-term liabilities                            18,613     10,222
                                                                 
Total noncurrent liabilities                           102,639    115,282
                                                                 
Stockholders' equity:                                             
Preferred stock – $0.01 par value; 40,000,000 shares   --        --
authorized, none issued
Common stock – $0.01 par value; 200,000,000 shares
authorized, 48,093,108 and 48,040,083 shares issued    481        481
and outstanding at October 28, 2012 and January 29,
2012, respectively
Additional paid-in capital                             103,227    98,622
Retained earnings                                     71,301     27,813
                                                                 
Total stockholders' equity                             175,009    126,916
                                                                 
Total liabilities and stockholders' equity             $366,228  $323,340



The Fresh Market, Inc.
                                                             
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
                                                             
                                                             
                                              For the Thirty-Nine Weeks Ended
                                              October 28,     October 30,
                                              2012            2011
Operating activities                                          
                                                             
Net income                                    $43,488       $33,137
Adjustments to reconcile net income to net                    
cash provided by operating activities:
Depreciation and amortization                  33,330         26,834
Loss on disposal of property and equipment     129            169
Share-based compensation                       3,218          1,643
Excess tax benefits from share-based           (288)          --
compensation
Deferred income taxes                          (4,248)        5,387
Change in assets and liabilities:                             
Accounts receivable                            (1,943)        (1,982)
Inventories                                    (9,935)        (7,926)
Prepaid expenses and other assets              (1,309)        (485)
Accounts payable                               7,742          8,517
Accrued liabilities and other long-term        6,222          5,089
liabilities
Net cash provided by operating activities      76,406         70,383
                                                             
Investing activities                                          
Purchases of property and equipment            (62,752)       (61,835)
Proceeds from sale of property and equipment   6,696          160
Net cash used in investing activities          (56,056)       (61,675)
                                                             
Financing activities                                          
Borrowings on revolving credit note            341,668        349,331
Payments made on revolving credit note         (358,768)      (355,181)
Debt issuance costs                            --            (1,056)
Proceeds from issuance of common stock         136            27
pursuant to employee stock purchase plan
Excess tax benefits from share-based           288            --
compensation
Proceeds from exercise of share-based          963            --
compensation awards
Net cash used in financing activities          (15,713)       (6,879)
                                                             
Net increase in cash and cash equivalents      4,637          1,829
Cash and cash equivalents at beginning of      10,681         7,867
period
                                                             
Cash and cash equivalents at end of period     $15,318       $9,696
                                                             
Supplemental disclosures of cash flow                         
information:
Cash paid during the period for interest       $733          $1,242
                                                             
Cash paid during the period for taxes          $35,765       $11,104



The Fresh Market, Inc.
Calculation of Return Metrics (1)
(Unaudited)
                                                          
                                         
                       October 28, 2012   October 30, 2011  October 30, 2011
                       Calculated Using   Calculated Using  Calculated Using
                       GAAP               GAAP              Adjusted
Return Metrics -        Net Income (2)     Net Income (2)    Net Income (3)
Trailing Four Quarters
Return on assets (4)    18.5%              3.9%              17.2%
Return on invested      26.3%              5.8%              25.2%
capital (5)
Return on equity (6)    35.3%              10.2%             33.1%
                                                          
(1)The return metrics do not represent financial measures prepared in
accordance with U.S. generally accepted accounting principles (GAAP). For
adiscussion of financial measures not prepared in accordance with GAAP,
please see below. The Company's management believes that thesepresentations
provide useful information to management, analysts and investors regarding
certain additional financial and business trends relating to its results of
operations and financial condition. In addition, management uses these
measures for reviewing financial results of the Company.The financial return
metrics are calculated on a trailing four quarter basis giving effect to the
recasting of 2010 quarters as a result of the Company'schange in its fiscal
year end.
                                                          
(2) The return metrics in this column are calculated using net income
determined in accordance with GAAP. Please see the footnotes below for
theformulas used to determine these return metrics.
                                                          
(3) The return metrics in this column are calculated using adjusted net
income, which is a non-GAAP measure. Please see the reconciliation below for
asummary of adjusted net income for this period to net income determined in
accordance with GAAP. The adjustment of $17.6 million for the
share-basedcompensation is related to the pre-IPO stock awards. We do not
reflect this as a recurring adjustment for our metrics calculation.
                                                          
Trailing four quarters                                     
ended October 30, 2011
                                                          
Net income             $10.9                             
Share-based
compensation expense    17.6                               
(net of tax)
Deferred tax adjustment 19.1                               
Pro forma income taxes --                                
Adjusted net income     $47.6                             
                                                          
(4) Net Income/Average Assets (for the columns which present metrics
calculated using net income) and Adjusted Net Income/Average Assets (for
thecolumn which presents metrics calculated using adjusted net income).
                                                          
(5) (1-Tax Rate)*(EBIT)/(Average Assets - Average Cash - Average Non-Interest
Bearing Current Liabilities). EBIT, which is not presented as a stand-alone
financial measure, is a non-GAAP financial measure and equals (i) net income
plus interest expense plus provision for income taxes (for the calculationset
forth in the columns which present metrics calculated using net income) and
(ii) adjusted net income plus interest expense plus provision for incometaxes
(for the calculation set forth in the column which presents metrics calculated
using adjusted net income).
                                                          
(6) Net Income/Ending Equity (for the columns which present metrics calculated
using net income) and Adjusted Net Income/Ending Equity (for the columnwhich
presents metrics calculated using adjusted net income).
                                                          
Non-GAAP Financial                                         
Measures
In addition to reporting return metrics derived from measures prepared in
accordance with GAAP, the Company provides return metrics derived from
adjusted net income. The Company has utilized adjusted net income, which is a
non-GAAP measure, for purposes of calculating these return metrics inorder to
eliminate the effect on operating results of certain expenses and charges
incurred in connection with the Company's November 2010 initialpublic
offering and related conversion to a taxable C-corporation, as well as pro
forma income taxes as if the Company had been taxed as a C-corporationduring
the entire period presented. The Company believes that the use of adjusted net
income to calculate these return metrics facilitates an understanding of the
Company's operations without the one-time impact associated with the November
2010 initial public offering. Non-GAAP financial measures should not be
considered in isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Investors are encouraged to review
thereconciliation of these non-GAAP measures to their most directly
comparable GAAP financial measure. A reconciliation of GAAP to non-GAAP
results hasbeen provided in footnote 3 above.

CONTACT: Lisa K. Klinger
         EVP-Chief Financial Officer
         (336) 217-4070
         lisaklinger@thefreshmarket.com
 
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