Fresh Market CEO Larry Appel

The Basch Report: Fresh Market Closures don't impact Florida

No Florida locations are affected.
By: 
Jul. 19, 2018

The Fresh Market Inc. said last week it will close 15 of its grocery stores, but no Florida locations are affected.

The company said the closures resulted from an organizational analysis under new CEO Larry Appel, a former Winn-Dixie Stores Inc. executive who was hired in September.

“Over the last eight months, our company has been executing a turnaround plan and we’ve seen great progress. However, for a variety of reasons unique to each retail location, that progress is not evenly distributed and, as a result, we have decided to close these long-term, underperforming stores,” Appel said in a news release.

Fresh Market, which operated 176 stores in 24 states before the announcement, said it does not anticipate any additional closures.

The company has five Northeast Florida stores, according to its website.

Appel spent 10 years at Jacksonville-based Winn-Dixie in several high-ranking positions, including chief operations officer and chief legal officer. He left in 2012 after Winn-Dixie merged with Bi-Lo LLC into the company now known as Southeastern Grocers.

Fidelity beats forecasts

Fidelity National Financial Inc. on Tuesday reported higher than expected second-quarter earnings.

Adjusted earnings of 86 cents a share were 18 cents higher than the second quarter of 2017, and above analysts’ forecasts, which ranged from 81 cents to 83 cents, according to Yahoo.

Revenue rose 3 percent to $2.12 billion, higher than the average analyst’s forecast of $2.08 billion.

In a news release, Fidelity Chairman Bill Foley said the Jacksonville-based company’s main business, title insurance, generated its best quarterly results in 15 years, with pre-tax earnings up 12 percent to $338 million and its adjusted profit margin at 17.1 percent.

“We are encouraged to see the single-digit growth in orders in both the residential purchase and commercial markets offsetting the double-digit decline in orders in the residential refinance market and feel our title business is well positioned to continue to deliver strong financial results through the remainder of 2018,” Foley said.

Northrop names new CEO

Northrop Grumman Corp. last week said Wes Bush will retire as CEO on Jan. 1 and be succeeded by Kathy Warden, currently president and chief operating officer.

Warden, 47, has been with Northrop since 2008 and became president Jan. 1.

Bush has been CEO since 2010, and his tenure included the designation of the company’s St. Augustine aerospace facility as a “center of excellence.”

When Northrop decided to expand the St. Augustine facility in 2013, it said it would expand its 1,000-job workforce by 400. However, current employment is 1,100, spokeswoman Jacqueline Jeransky said by email.

“The Northrop Grumman St. Augustine personnel numbers have increased since our CoE designation in 2013.  At this time, we are meeting our planned business growth objectives,” she said.

Rayonier AM rated ‘buy’ by analyst

Despite positive developments in recent months including an acquisition that doubled the company’s size and the opening of a joint venture lignin plant, Rayonier Advanced Materials Inc.’s stock has been floundering.

However, one analyst expects a rebound in the stock.

Berenberg Capital Markets analyst Paretosh Misra last week initiated coverage of Jacksonville-based Rayonier AM with a “buy” rating and a $25 price target, 42 percent above its stock price of $17.59 at the time of the report.

“We think consensus is overly bearish on the net earnings benefit from various self-help measures such as cost cutting, new product launches, and synergies from the Tembec acquisition,” Misra said in his research report.

Misra said he anticipates a rebound in Rayonier AM’s core market of cellulose specialties products, and he also expects more activity as the company reduces debt.

“The market is not focusing on management’s potential to accelerate stock buybacks, investment in high return projects, and M&A from 2019, after leverage has been reduced,” he said.

CSX CEO’s 2020 goal reached in 2Q 2018 while railroad company’s headcount continues to decline.

As CSX Corp.’s new management team continues to overhaul operations, the Jacksonville-based railroad achieved one of its key targets two years early.

In its earnings report Tuesday, CSX said its operating ratio dropped to 58.6 percent in the second quarter, down from an adjusted 63.5 percent the previous year.

That ratio of operating expenses divided by revenue was “clearly the lowest ever for CSX and I believe the lowest ever by a U.S. railroad,” CEO James Foote said in a conference call with analysts late Tuesday afternoon.

Foote and his team had set a goal of reaching a 60 percent operating ratio by 2020.

With the increased efficiency, CSX reported earnings of $1.01 a share, up from adjusted earnings of 64 cents in the second quarter of 2017. That was better than analysts’ forecasts, which ranged from 81 cents to 89 cents, according to Yahoo Finance.

Revenue rose 6 percent to $3.1 billion, better than the average analyst’s forecast of $2.99 billion.

The revenue gains included a 7 percent increase from coal shipments to $569 million. Coal used to be CSX’s biggest business before declining demand in the U.S. sent coal revenue plummeting.

Demand for export coal offset the declines in U.S. coal shipments, the company said.

Revenue from chemical shipments, which rose 7 percent to $588 million in the quarter, has surpassed coal as the railroad's biggest business.

Foote said CSX is raising its forecast for full-year revenue growth from “up slightly” to up by a mid-single-digit percentage.

“This slightly higher outlook is a reflection of a number of factors, including our belief that export coal strength will continue, higher fuel prices will remain and a healthy economic backdrop,” he said.

“Obviously, there are factors we cannot control, mainly the economy, that can provide some variability as we get into the back half and fourth quarter specifically. But this is how we see it today.”

The increase in revenue is helping its operating ratio, but CSX also is benefiting from expense cuts, including job reductions.

The company’s headcount from its operations throughout the eastern U.S. fell by about 200 in the quarter to 22,810 as of June 30, but that’s down from 25,512 a year ago.

In the conference call, CSX officials said its employment targets haven’t changed. They previously said they want total employment of 21,000 by the end of 2020.

“Our G&A headcount continues to decline, as we look for every opportunity to absorb attrition,” Chief Financial Officer Frank Lonegro said.

“Over the past year, we have eliminated unnecessary layers of management, yielding a structure that is cost-effective and enables rapid communication and decision-making across our network,” he said.

Although the company hit its operating ratio target early, Foote said the company is not revising its long-term outlook.

“We have a lot of work to do and we got a lot of help this quarter from coal,” he said.

“If things continue to align, I continue to say I have confidence that we can hit a number, 60, which everybody I think thinks is extremely, extremely impressive.”

At CSX’s annual shareholders meeting in May, Foote said improving safety is a top priority for the railroad. The company hired a new chief safety officer and brought in an outside safety consulting firm shortly after that meeting.

In the second quarter, CSX said reportable injuries per 200,000 man-hours were 0.91, down from 1.18 the previous year.

“We intend to be the safest railroad,” Foote said in Tuesday’s conference call.