NEW YORK — Fairway Market Holdings on Thursday posted a loss in its first quarter as a public company, but cited gains in both sales and EBITDA.
The high-volume specialty chain, which had an initial public offering in April, reported a loss of $27.9 million for the 13-week first quarter, which ended June 30, compared with a loss of $3.9 million in the year-ago quarter.
Sales increased 21% to $187 million in the first quarter, with same-store sales up 1.4% Customer transactions were up 0.8% and basket size grew 0.5%.
Adjusted EBITDA increased 12% to $12.7 million in the first quarter.
“We are pleased to report strong operating results for the quarter, our first as a public company,” said Charles Santoro, Fairway’s executive chairman. “Fairway remains on track with our long-term strategy designed to expand our store count and increase our margins. We remain confident in our ability to execute these plans.”
Chief Executive Officer Herb Ruetsch added, “We executed well this quarter with improved gross margin performance and good control of our operating expenses despite the added costs associated with being a public company."
The company attributed the increase in losses for the quarter primarily to transaction expenses and fees related to the IPO, a change in the income tax provision and an increase in non-cash equity compensation. The adjusted net loss in the quarter was $2.4 million, vs. the adjusted net loss of $3.8 million in the first quarter of the prior year.
Read more: Fairway Posts Q4 Loss; Comps Up 2.4%
Fairway completed its IPO of approximately 15.7 million shares of common stock, including 2.3 million shares sold by existing stockholders, in April. It received approximately $158.8 million in net proceeds after the underwriting discount and expenses related to the IPO.
Fairway used the net proceeds to pay approximately $76.8 million of preferred dividends, $9.2 million to terminate a management agreement with Sterling Investment Partners and approximately $8.1 million to pay contractual bonuses. The remaining approximately $64.7 million is intended for new store growth and general corporate purposes.
The company charged $18.1 million of IPO related expenses to operating results in the first quarter of the current fiscal year.
Separately, Fairway also said Thursday that it plans to open the anchor supermarket at Hudson Yards, a high-profile development on Manhattan’s west side. The 45,875-square-foot site will occupy the ground floor retail space in the South Tower, adjacent to a spur of the High Line elevated park. It is scheduled to open in 2015.
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