Supermarkets on the Stock Market: A Performance Comparison
Year-to-date stock market update
2016 has brought different fortunes for different supermarkets. The Fresh Market (TFM) has been the biggest winner and gained around 22% as of April 27, 2016. The company was the worst performer in 2015 and had lost around 43% of its value during the year. TFM’s stock market fate reversed after acquisition rumors circulated in February. Its price gained further momentum after the announcement of Apollo Global Management’s (APO) acquisition bid in mid-March.
Kroger loses momentum in 2016
Kroger (KR) was the best-performing supermarket in 2015, gaining 32% during the year. This year, the company has lost around 14% as of April 29, 2016. The company’s poor stock market performance can be explained partially by its unimpressive 4Q16 results. Kroger reported weaker-than-expected 4Q16 sales and a weak same-store fiscal 2017 guidance.
Sprouts is finally rewarded for its good financial performance
Sprouts Farmers Market (SFM) has done pretty well so far this year. The company has gained ~5% YTD (year-to-date) after losing 22% in 2015. SFM has outperformed its peers and has registered best-in-class same-store sales and margins over the past several quarters. The company has achieved 35 consecutive quarters of positive same-store sales, reporting a 7.4% increase in sales comps during the last reported quarter. In comparison, Kroger (KR), Whole Foods Market (WFM), and The Fresh Market (TFM) registered sales comps of 3.7%, -1.8%, and -3.7%, respectively.
SuperValu continues to lose value
SuperValu has continued with its dull stock market performance. It has lost 26% YTD, after registering a 30% fall in its stock price during 2015. Whole Foods Market (WFM) falls in the same league. The company’s stock price has come down by 12.6% YTD, after registering a 33% decline in 2015. Both companies have been facing traffic losses and margin declines over the past several quarters on account of intense competition.
Together, SuperValu (SVU), Kroger (KR), Whole Foods (WFM), The Fresh Market (TFM), and Sprouts Farmers Market (SFM) constitute ~5% of the SPDR S&P Retail ETF (XRT). Read on to the next part of this series to understand the valuations of supermarket chains.
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