The Fresh Market is wilting under competitive pressures

The Fresh Market is not so fresh anymore to shoppers, if the retailer's second quarter results are any indication.

The upscale grocery chain reported that same-store sales decreased 1% for the second quarter ended July 26, and the retailer expects an even bigger decrease in the next quarter, both below analysts' estimates.

The company reported 36 cents EPS for the quarter, missing analysts’ estimates of 40 cents.Net income rose 53.5% to $17.5 million, while net sales increased 4.7% to $442.1 million.

The news sent TFM stock down 19% on Friday, the biggest decline since the company went public in 2010.

Interim CEO Sean Crane said: “Our second quarter results reflect changes in our pricing and promotional investments, which were less effective than anticipated in a more challenging macro environment. However, the financial health of the business remains sound as we continue to deliver some of the strongest adjusted EBITDA margins and returns on invested capital in the industry. We are committed to increasing our profitability as we work to stabilize and improve our future comparable store sales. As we move forward, we remain focused on our initiatives to build The Fresh Market brand, elevate our in-store experience and food offering, and capture greater operational efficiencies.”

In January Craig Carlock stepped down as president and CEO and resigned from the board. Chief Operating Officer Crane was named interim CEO. The length of time the company is taking to name a CEO has been a source of consternation among investors.

Like Whole Foods, the Fresh Market has been struggling to boost sales and has had to resort to price cuts and promotions to compete.

The retailer plans to open 18 new stores and remodel or refresh nine to 10 stores during the full fiscal year.

For the full fiscal year, Fresh Market expects total net sales growth of 5% to 7% and same store sales decline of 1% to 2.5%.