Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of specialty grocer The Fresh Market (TFM) climbed 11% today after its quarterly results and outlook impressed Wall Street.
So what: The stock has slumped over the past several months on signs of slowing growth, but today's first-quarter results -- profit increased 15% on a 13% jump in sales -- coupled with upbeat guidance for the full year suggests that things are turning around. In fact, same-store sales for the quarter increased 3% while gross margins expanded 60 basis points, suggesting that Fresh Market's competitive position is steadily strengthening.
Now what: For the full year, management now sees same-store sales growth of 2.5%-4.5%, up nicely from an earlier view of 2%-4% growth. "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," said CEO Craig Carlock in a statement. With the stock now up about 40% from its 52-week lows and sporting a forward P/E of about 30, however, I'd hold out for a wider margin of safety before buying into that bullishness.
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