SHEBOYGAN, Wis. -- Fresh Brands at its annual meeting here last month said it has identified some acquisition candidates and hopes to add another brand to its portfolio by next year.
The company, which operates, franchises and supplies the Piggly Wiggly concept in Wisconsin, and last year acquired the eight-unit Dick's Supermarkets chain, said its goal was to add at least 10% to next year's revenues through the acquisition of another brand. Revenues last year were about $580 million.
"We have several irons in the fire as far as acquisition potentials, and we are in the process of reviewing those right now," said Mike Houser, vice chairman and chief marketing officer, Fresh Brands, in an interview with SN after the annual meeting.
The company said that it would contemplate a follow-up stock offering to be used as currency in acquiring additional brands. To generate investor interest in the company's stock, Fresh Brands has beefed up its investor relations by meeting with local analysts and by retaining a public relations and investor relations firm.
Other objectives outlined at the meeting included replacing stores, growing same-store sales through the introduction of new general merchandise items and other programs, and building the company's infrastructure.
Houser said Fresh Brands was eyeing the possibility of adding more "Pig Stop" fuel centers to its stores by the first quarter of next year, after a Piggly Wiggly franchisee began operating one last year in Crivitz, Wis.
"We're expanding that format to more of a convenience-store format," Houser said. "We're looking at both a mini-convenience store and a larger convenience store, both under the 'Pig Stop' name."
In a conference call with analysts discussing its first-quarter earnings last month, Fresh Brands said it was conducting targeted promotions to better compete in an arena in which nearly one-third of the company's stores are being impacted either by supercenters or by low price-oriented competitors.
In addition, Elwood Winn, president and chief executive, said that the sluggish economy and high unemployment in Wisconsin are driving consumers to trade down in their purchases.
Because of the increasing competition and slow economy, the company expected earnings for the current fiscal year to be on the "lower end" of the previously projected range of $1.60 to $1.75 per share, compared with $1.48 per share last year.
Fresh Brands reported first-quarter net income of $1.94 million for the 16-week period ended April 20, an increase of 2.6% over year-ago results. Sales were $184.14 million, up 19.7% over the year-ago quarter, which did not include sales from the Dick's acquisition. Same-store sales rose 1.1% over year-ago levels at Piggly Wiggly.
