The Fresh Market, Inc. Reports First Quarter 2013 Earnings

The Fresh Market, Inc. Reports First Quarter 2013 Earnings

            - Earnings Per Diluted Share Increased 14.6% to $0.46

                         - Net Sales Increased 12.9%

                   - Comparable Store Sales Increased 3.0%

GREENSBORO, N.C., May 29, 2013 (GLOBE NEWSWIRE) -- The Fresh Market, Inc.
(Nasdaq:TFM), a high-growth specialty retailer, today announced unaudited
sales and earnings results for its first quarter ended April 28, 2013.

Financial Overview

In the first quarter of fiscal 2013, net sales increased 12.9% to $366.6
million and comparable store sales increased 3.0%, compared to the
corresponding thirteen week period ended April 29, 2012. Net income in the
first quarter of fiscal 2013 was $22.1 million, compared to $19.3 million in
the corresponding thirteen week period in fiscal 2012. Diluted earnings per
share in the first quarter of fiscal 2013 were $0.46, an increase of 14.6%
over diluted earnings per share of $0.40 for the corresponding thirteen week
period in fiscal 2012.

Craig Carlock, President and Chief Executive Officer commented, "We were
pleased to see our business and customer traffic improve in the first quarter.
New store development remains on track and our solid results give us
confidence as we assess customer behavior and our outlook for the balance of
the year."

Operating Performance

First quarter total net sales increased 12.9% to $366.6 million and comparable
store sales increased 3.0% to $312.9 million, compared to the corresponding
thirteen week period in fiscal 2012. The first quarter comparable store sales
increase resulted from a 2.4% increase in average transaction size and a 0.6%
increase in the number of transactions.

The Company's gross profit increased 14.8%, or $16.6 million, to $129.3
million in the first quarter of fiscal 2013, compared to the corresponding
thirteen week period of fiscal 2012. For the same period, the gross margin
rate increased 60 basis points to 35.3% compared to the corresponding prior
year period. This increase in the Company's gross margin rate was primarily
attributable to an increase in the merchandise margin, and also reflected a 10
basis point reduction in LIFO expense as a percentage of sales.

Selling, general, and administrative expenses for the first quarter of fiscal
2013 increased $11.0 million to $81.5 million, compared to the corresponding
thirteen week period in fiscal 2012.Selling, general, and administrative
expenses as a percentage of sales increased by 50 basis points to 22.2% for
the period, compared to 21.7% for the corresponding thirteen week period in
fiscal 2012.This increase in the selling, general and administrative expense
rate was primarily attributable to employee healthcare claim costs.The
Company also incurred higher expenses associated with an additional layer of
annual share based compensation.In the first quarter of 2013, the Company
opened two new stores compared to three new stores in the corresponding prior
year period.

Operating income increased $4.3 million to $35.4 million for the first quarter
of fiscal 2013, compared to $31.1 million for the corresponding thirteen week
period of fiscal 2012.Operating income as a percentage of sales for the first
quarter of fiscal 2013 increased 10 basis points to 9.7%, compared to 9.6% for
the corresponding period of fiscal 2012.This increase was primarily
attributable to an improvement in gross margin rate.

The effective tax rate for the first quarter of fiscal 2013 was 37.1% of
pre-tax income and compares to 37.3% for the corresponding thirteen week
period of fiscal 2012.The lower rate was due to various state and federal tax
credit opportunities.

Balance Sheet/Cash Flow

During the first quarter of fiscal 2013, the Company generated $45.9 million
in cash flow from operations and invested $17.2 million in capital
expenditures, of which $13.7 million related to new and remodeled stores.

The Company's cash balance as of April 28, 2013 was approximately $11.0
million.Total debt as of April 28, 2013 decreased 64.3%, or $27.0 million, to
$15.0 million from a balance of $42.0 million as of January 27, 2013.

Average inventory on a FIFO basis per store at the end of the first quarter of
fiscal 2013 increased 5.5%, compared to the corresponding period in fiscal
2012.The increase resulted from inventory investments in faster growing
categories and new product assortments to support the Company's overall sales
growth.Commodity costs also increased in certain departments, such as
produce, meat and dairy.

On a trailing four quarter basis for the period ended April 28, 2013, the
Company's return on assets was 18.4%, return on invested capital, excluding
excess cash, was 25.6%, and return on equity was 30.2%.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 first quarter of fiscal 2013, the Company opened two new stores in
Charlottesville, Virginia and Aiken, South Carolina.As of April 28, 2013, the
Company operated 131 stores in 25 states.

The following table provides additional information about the Company's real
estate and store opening activities through the first quarter of fiscal
2013.Leases signed as of May 29, 2013 are for stores expected to open during
or after fiscal 2013.

                                        Stores Opened       Leases Signed for
                                       in FY 2013          Future
                                                            Store Locations ^1
Number of new leased store locations    2                   30
Number of ground leased and owned       --                  2
property store locations
Number of relocations                   --                  --
Average capital cost per store ^2       $3.3 million        
                                       Information for All 
                                        Open Stores
Average store size (gross square feet)  21,054              
Total rentable square footage (at end   2.8 million         
of period)

Note 1: Includes leases for stores expected to open after May 29, 2013 and
such leases typically include customary leasing conditions.In general, we do
not announce the location of a new store until all conditions to the lease are
satisfied or our involvement in the property or project will be made public in
connection with governmental permitting or approvals or in dealing with other
third-parties.We generally identify a store as "coming soon" when we take
possession of the property and commence our construction related
activities.The Company's website sets forth the most current list of
announced lease locations 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.Lease
inducement costs and similar prepayments in connection with acquiring or
entering into new leases are not included in the capital cost per store and
are included as a long-term asset and expensed over the primary term of the
lease.

Fiscal 2013 Outlook

In addressing guidance, Carlock commented, "Our customers are responding well
to the current economic climate, which gives us incremental comfort with our
full-year outlook for fiscal 2013.We now anticipate comparable store sales to
rise 2.5% to 4.5% this fiscal year."

For fiscal 2013, management expects the Company to:

  oOpen 19 to 22 new stores, with 4 to 6 new stores opening in the second
    quarter and 13 to 15 new stores opening in the second half of the year
  oRemodel 3 to 5 stores and have no relocations
  oSpend approximately $130 million to $150 million in capital expenditures,
    primarily related to real estate investments
  oIncrease comparable store sales 2.5% to 4.5%
  oAchieve flat to modest growth in operating margin as a percentage of
    sales, as the Company continues to make operating expense investments
    related to its accelerated growth plans
  oGenerate diluted earnings per share of $1.51 to $1.58, assuming an
    effective tax rate of 37.0%, where earnings per share in the second half
    of fiscal 2013 exceed earnings per share in the first half of the year

2013 First Quarter Earnings Conference Call

The Company will host a conference call today at 9:00 a.m. Eastern
Time.During the conference call, the Company may answer questions concerning
its business.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.

The call will be broadcast via a live audio webcast at www.thefreshmarket.com,
within the Investor Relations section of the Company website, and a recording
will be available for 30 days following the date of the event.Investors and
analysts interested in participating on the call may do so by dialing (877)
852-2928.

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 May 29, 2013, the Company
operates 131 stores in 25 states across the United States. For more
information, please visit www.thefreshmarket.com.

Forward Looking Statements: This document contains forward-looking statements
that reflect our plans, estimates, and beliefs regarding future business and
financial performance and financial condition, and include those in the
"Fiscal 2013 Outlook" section above. These statements 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 or contribute actual future results to differ materially from those
expressed in any forward-looking statements: accounting entries and
adjustments at the close of our fiscal quarter; 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 economic and financial conditions, including the outcome of
negotiations surrounding U.S. fiscal policy which, even if resolved, may be
adverse due to tax increases and spending cuts, and the resulting impact on
consumer confidence; other 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 anticipated
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 third parties 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 matters; numerous other matters of national, regional and global scale,
including those of a political, economic, business, and competitive nature;
and other factors as set forth from time to time in our filings with the
Securities and Exchange Commission. Any forward-looking statement, including
any contained herein, speaks only as of the time of this release and we do not
undertake to update or revise them as more information becomes available or to
disclose any facts, events or circumstances after the date of this release
that may affect the accuracy of any forward looking statement.

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
                                            April 28,      April 29,
                                            2013           2012
                                                          
Sales                                        $366,626     $324,784
Cost of goods sold                           237,289       212,093
Gross profit                                 129,337       112,691
                                                          
Operating expenses:                                        
Selling, general and administrative expenses 81,478        70,465
Store closure and exit costs                 140           573
Depreciation                                 12,335        10,569
Income from operations                       35,384        31,084
Interest expense                             244           356
Income before provision for income taxes     35,140        30,728
Tax provision                               13,020        11,458
                                                          
Net income                                  $22,120      $19,270
                                                          
Net income per share:                                      
Basic and diluted                            $0.46        $0.40
                                                          
                                                          
Weighted average common shares outstanding:                
Basic                                       48,159,785    48,046,251
                                                          
Diluted                                      48,326,452    48,255,646
                                                          
Comprehensive income:                                      
Net income                                   $22,120      $19,270
Other comprehensive income                   --           --
                                                          
Total comprehensive income                   $22,120      $19,270



The Fresh Market, Inc.
                                                                 
Consolidated Balance Sheets
(In thousands, except share amounts)
(unaudited)
                                                       April 28,  January 27,
                                                       2013       2013
                                                                 
Assets                                                            
Current assets:                                                   
Cash and cash equivalents                               $11,017  $8,737
Accounts receivable, net                                6,412     6,830
Inventories                                             42,383    43,985
Prepaid expenses and other current assets               6,971     7,675
Deferred income taxes                                   3,322     3,784
                                                                 
Total current assets                                    70,105    71,011
                                                                 
Property and equipment:                                           
Land                                                    2,846     2,846
Buildings                                               19,086    19,106
Store fixtures and equipment                            277,918   272,249
Leasehold improvements                                  175,246   170,483
Office furniture, fixtures, and equipment               12,727    12,224
Automobiles                                             1,310     1,335
Construction in progress                                27,911    18,661
                                                                 
Total property and equipment                            517,044   496,904
Accumulated depreciation                                (217,258) (207,060)
                                                                 
Total property and equipment, net                       299,786   289,844
Restricted cash                                         --       14,205
Deferred lease costs                                    21,243    7,140
Other assets                                            3,897     3,169
                                                                 
Total assets                                            $395,031 $385,369
                                                                 
Liabilities and stockholders' equity                              
Current liabilities:                                              
Accounts payable                                        $35,257  $35,634
Accrued liabilities                                     63,808    54,385
                                                                 
Total current liabilities                               99,065    90,019
                                                                 
Long-term debt                                          15,000    42,000
Deferred income taxes                                   23,971    24,053
Deferred rent                                           11,750    11,341
Other liabilities                                       23,335    20,097
                                                                 
Total noncurrent liabilities                            74,056    97,491
                                                                 
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, 48,172,913 and 48,144,620 shares issued and 482       482
outstandingas of April 28, 2013 and January 27, 2013,
respectively
Additional paid-in capital                              107,362   105,431
Retained earnings                                      114,066   91,946
                                                                 
Total stockholders' equity                              221,910   197,859
                                                                 
Total liabilities and stockholders' equity              $395,031 $385,369



The Fresh Market, Inc.
                                                               
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
                                                               
                                                 For the Thirteen Weeks Ended
                                                 April 28,      April 29,
                                                 2013           2012
Operating activities                                            
                                                               
Net income                                       $22,120      $19,270
Adjustments to reconcile net income to net cash                 
provided by operating activities:
Depreciation and amortization                     12,390        10,624
(Gain) loss on disposal of property and equipment (43)          32
Share-based compensation                          1,392         1,016
Excess tax benefits from share-based compensation (16)          (58)
Deferred income taxes                             380           (793)
Change in assets and liabilities:                               
Accounts receivable                               418           773
Inventories                                       1,602         3,107
Prepaid expenses and other assets                 (14,182)      (3,710)
Restricted cash                                   14,205        --
Accounts payable                                  (377)         (3,297)
Accrued and other liabilities                     8,010         8,639
Net cash provided by operating activities         45,899        35,603
                                                               
Investing activities                                            
Purchases of property and equipment               (17,219)      (17,106)
Proceeds from sale of property and equipment      61            6,630
Net cash used in investing activities             (17,158)      (10,476)
                                                               
Financing activities                                            
Borrowings on revolving credit note               109,862       110,517
Payments made on revolving credit note            (136,862)     (135,417)
Proceeds from issuance of common stock pursuant   55            46
to employee stock purchase plan
Excess tax benefits from share-based compensation 16            58
Payments on withholding tax for restricted stock  (66)          --
unit vesting
Proceeds from exercise of share-based             534           219
compensation awards
Net cash used in financing activities             (26,461)      (24,577)
                                                               
Net increase in cash and cash equivalents         2,280         550
Cash and cash equivalents at beginning of period  8,737         10,681
                                                               
Cash and cash equivalents at end of period        $11,017      $11,231
                                                               
Supplemental disclosures of cash flow                           
information:
Cash paid during the period for interest          $124         $338
                                                               
Cash paid during the period for taxes             $6,454       $5,037
                                                               
Non-cash investing and financing activities:                    
Property and equipment additions via financings   $1,516       $--



The Fresh Market, Inc.
Calculation of Return Metrics (1)
(Unaudited)
                                                       
                                                       
                                  April 28, 2013        April 29, 2012
                                  Calculated Using      Calculated Using
                                  GAAP                  GAAP
Return Metrics - Trailing Four     Net Income           Net Income
Quarters
Return on assets (2)               18.4%                 18.6%
Return on invested capital (3)     25.6%                 26.9%
Return on equity (4)               30.2%                 38.8%
                                                       
(1)The return metrics do not represent financial measures prepared in
accordance with U.S. generally accepted accounting principles (GAAP). For a
discussion 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 relatingto 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.Our manner of calculating these
return metrics is set forth in the footnotesbelow and may not be comparable
to the manner in which other companies calculate these return metrics.
                                                       
(2) Net Income/Average Assets                          
                                                       
(3) (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 net income plus
interest expense plus provision for income taxes.
                                                       
(4) Net Income/Ending Equity                           
                                                       
Non-GAAP Financial Measures                             
While the Company reports financial results in accordance with US generally
accepted accounting principles (GAAP), we also provide certain non-GAAP
operating performance measures. This non-GAAP information is provided as a
supplement, not as a substitute for measures of financial performance prepared
in accordance with GAAP. We use this information internally to make operating
decisions and believe it is helpful to investors because it allows
period-to-period comparisons of our ongoing operating results. The
information can also be used to perform trend analysis and to better identify
operating trends that may otherwise be masked or distorted by these types of
items. Finally, the Company believes such information provides a higher
degree of transparency for certain items. Investors should consider non-GAAP
measures in addition to, not as a substitutefor measures of financial
performance prepared in accordance with GAAP.

CONTACT: Investor Relations
         (336) 615-8065
         investorrelations@thefreshmarket.com
 
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