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During the IPO season Francis Gaskins, editor of IPOdesktop.com, regularly appears on CNBC TV, Bloomberg, thestreet.com & other financial cable channels. On the day of the Visa IPO he appeared on four cable TV financial shows including Bloomberg & CNBC. Over the past five years he has... More
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  • IPOreport -- Fresh Market, The (TFM) 0 comments
    Nov 1, 2010 1:33 PM | about stocks: TFM, WFM, SWY, KR, WMT, TGT
    IPO calendar for Nov 1wk

    Fresh Market, The (NASDAQ:TFM) $250mm IPO
    Market cap of $912mm at price point mid-point of $19
    Scheduled for Friday, Nov 5

    TFM Valuation Metrics

    SUMMARY
    . 100% of proceeds to shareholders
    . Same annualized P/E as Whole Foods but Whole Foods has a lower price to book value (stronger balance sheet).
    . Same store sales increases of around 5%
    . Potential expansion to 500 stores in the US seems overly optimistic, at least in the foreseeable future.  See ‘competition’ below

    BUSINESS
    . The Fresh Market is a high-growth specialty retailer focused on creating an extraordinary food shopping experience for our customers.
    . Currently operate 100 stores in 20 states mostly east of the Mississippi River
    EXPANSION
    Believe that the U.S. market can support at least 500 The Fresh Market stores operating under the current format.

    RECENT DEVELOMENTS
    > New Store Openings
    Opened four new stores during the third quarter of 2010 and one new store in October 2010.
    Preliminary Results of Operations (Unaudited) for the quarter ended September 30, 2010
    > Sales
     Sales increased approximately 13% to approximately $685 million for the nine months ended September 26, 2010 from approximately $606 million for the nine months ended September 27, 2009.
    . Also expect to report that sales increased approximately 14% to approximately $229 million for the three months ended September 26, 2010 from approximately $201 million for the three months ended September 27, 2009.
    . The increase in sales for both the three and nine months ended September 26, 2010 was attributable primarily to sales from eight stores for the three and nine months ended September 26, 2010 that were not open during the three or nine months ended September 27, 2009, increased sales from three stores that were only opened during the latter half of the third quarter ended September 27, 2009, and an overall increase in comparable store sales.
    . The sales for the nine months ended September 26, 2010 were partially offset by the closure of one store in the first quarter of 2009. There were 88 comparable stores and 11 non-comparable stores open at September 26, 2010.
    > Comparable store sales increases
    Comparable store sales increased 4.6% for the nine months ended September 26, 2010 compared to the nine months ended September 27, 2009, as a result of increases in both the number of transactions and the average transaction size at comparable stores.
    . Comparable store sales increased 5.1% for the three months ended September 26, 2010 compared to the same period of 2009, as a result of increases in both the number of transactions and the average transaction size at our comparable stores.
    > Net income
    Expects to report that net income increased approximately 45% to approximately $41 million for the nine months ended September 26, 2010 as compared to approximately $28 million for the nine months ended September 27, 2009, and approximately 29% to approximately $11 million for the three months ended September 26, 2010 as compared to $8 million for the three months ended September 27, 2009.

    COMPETITION
    . Competition varies and includes national conventional supermarkets such as Kroger and Safeway, regional supermarkets such as Harris Teeter and Publix, national superstores such as Wal-Mart and Target,
    . Alternative food retailers such as Whole Foods and Trader Joe’s, and local supermarkets, natural foods stores, smaller specialty stores and farmers’ markets.
    . Trader Joe's is a privately held chain of specialty grocery stores headquartered in Monrovia, California. As of August 2010.  Trader Joe's had a total of 345 stores  Approximately half of its stores are in California, with the heaviest concentration in Southern California, but the company also has locations in 24 other states and Washington, D.C.
    . Whole Foods Market (NASDAQ: WFMI) is a foods supermarket chain based in Austin, Texas which emphasizes "natural" and organic products, with more than 270 stores in North America and the United Kingdom

    USE OF PROCEEDS
    100% to selling shareholders

    TFM Valuation Metrics

    Stocks: TFM, WFM, SWY, KR, WMT, TGT
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