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In Q2 2015, promotions didn't help the company as much as anticipated. Source: thefreshmarket.com.

What: Shares of The Fresh Market (NASDAQ:TFM) fell 29.4% in August, according to data from S&P Capital I.Q.

So what: The Fresh Market stock fell precipitously -- nearly 26% -- on August 21, a day after the release of its second-quarter 2015 earnings. While revenue increased 4.7% over the prior-year quarter, comparable-store sales decreased 1%. Gross margins also declined slightly, by roughly 30 basis points, to 33.7%. And in a final blow to investor confidence, management trimmed its full year 9%-11% revenue growth estimate to a range of 5%-7%, and slashed diluted earnings per share guidance, from a span of $1.61-$1.73, to $1.31-$1.45.

Management blamed its results on ineffective promotional activities, as well as a "more challenging macro environment." The "challenging macro environment" refers to competition premium foods grocers like the Fresh Market and Whole Foods Market face, as conventional grocery companies increasingly stock organic and specialty items while attempting to grab market share based on price. 

Investors dumped Fresh Market shares out of a fear that if investments in promotions couldn't drive positive comparable-store sales, more drastic pricing measures may be needed to expand revenue against prior comparable periods. This would impact gross margin and net income unfavorably. "Comps" have been sliding for some time, hitting a peak of 5.7% on an annual basis in 2013, and decreasing to 2.9% last year. In the first six months of this year, comps stand at negative 0.6%.

Now what: The Fresh Market's stock has recovered about 4% so far this month. This is primarily due to the September 1 appointment of industry veteran Richard Anicetti as CEO, a position that had been in interim status since January.

Anicetti is a former CEO of Delhaize Group's Food Lion division. His experience at the lower-cost grocery chain may be helpful in improving margins, which will in turn provide room for price competitiveness in the effort to turn around comparable sales. And he may bring a fresh perspective to the company's strategic direction as it seeks to reinvigorate its value proposition. After last month's stock performance, investors will likely embrace any sign of positive change.

John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Asit Sharma has no position in any stocks mentioned. The Motley Fool owns and recommends Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.