Yahoo Finance Supermarket Stocks in 2016: Are the Little Guys Fighting Back?
Did You Check Out with the Right Supermarket Stocks this Month?
A quick recap of 2015
In 2015, the Market wasn’t kind to most of the supermarket stocks included in our analysis. The three organic players, namely Sprouts Farmers Market (SFM), The Fresh Market (TFM), and Whole Foods Market (WFM), fell more than 20% during the year, with TFM losing more than 40% of its value on concerns of rising competition in the organic space. While TFM and WFM reported poor same-store sales during the year, SFM registered solid growth in same-store sales and has recorded 34 consecutive quarters of positive sales comps.
SuperValu (SVU) fell 30% during the year after a poor performance in its top line and margins. Kroger (KR) was the only notable grocery chain that registered gains in the Market. Its stock price rose 32% during the year. The company’s financial performance has been outstanding over the last two years and has topped analysts’ earnings estimates in the last eight quarters.
Looking at the first two months of 2016
After sliding in January (ranging from -6% for Kroger to -33% for SuperValu), all five supermarkets recovered in February, though the recovery was different for each player. TFM rose around 21% in February, riding high on the news of a possible acquisition by Kroger. Although it is still trading 45% below its 52-week high, it has only fallen 1.4% YTD (year-to-date).
SFM was the second biggest winner in February, rising 20% during the month and 6.3% YTD. On February 25, the company’s stock rose 9% on better-than-expected results in fiscal 2015.
Kroger (KR), Whole Foods Market (WFM), and SuperValu (SVU) have fallen 6.6%, 5.9%, and 24.9%, respectively, on a YTD basis (as of February 29, 2016).
SuperValu (SVU), Kroger (KR), Whole Foods Market (WFM), The Fresh Market (TFM), and Sprouts Farmers Market (SFM) together constitute ~5% of the SPDR S&P Retail ETF (XRT).
In the next part of this series, we’ll look at the valuations of the supermarket stocks.
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