Shares in Fairway Group Holdings Corp took a hammering in pre-market trade today (7 February), after CEO Herbert Ruetsch announced his retirement and the US retailer reported another quarter of losses.
Ruetsch has worked at Fairway for 15 years, including the last two as chief executive. During this time, he oversaw Fairways listing on the NASDAQ in April.
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The group’s president, William Sanford, will serve as interim CEO until a replacement is appointed.
Separately, in its quarterly update released late yesterday, Fairway reported a net loss of $31.3m for the three months to 29 December. A year earlier it took a loss of $51.8m.
Shares in Fairway plummeted in pre-market trading, dropping 24.15% as the market reacted negatively to another quarter of losses. The stock rallied somewhat in early trade, rising 2.60% by 8.50 in New York.
The company did, however, grow its adjusted operating profit in the period. Fairway slowed its investments in stores openings and adjusted EBITDA rose from $12.4m last year to $12.8m this year.
Net sales increased 22.9% to US$205.7m in the three months to end-December. Gains were driven by a near-30% rise in footfall and the company said progress was made on its strategy to increase private label as a proportion of total sales.
Fairway executive chairman Charles Santoro remained upbeat on the group’s long-term growth potential. “Fairway’s differentiated food retail platform remains well positioned to capture incremental market share as we continue to expand our store base and capitalize on the shifting consumer focus towards healthy living and value,” he said.
