Dive Brief:

• Publix reported a 1.6% increase in same-store sales to go along with revenue of $495 million and total sales of $8.4 billion, according to a company release. Earnings and sales rose 3.5% and 3.6%, respectively, from a year earlier.

• The retailer, whose stock is only available to employees and members of its board, also reported an 8% drop in its stock price, from $39.15 per share to $36.05 per share.

• “This has been a tough quarter for supermarket companies in the stock market,” Publix CEO & President Todd Jones said in a statement. “We continue to be focused on growing sales and profits while providing premier customer service.”

Dive Insight:

Publix’s same-store sales growth is a nice bounce back for the company, which in May reported its first quarterly decline in the all-important metric in seven years. The company blamed the results on new stores replacing old ones and to the Easter holiday falling on a different quarter last year. Price deflation, which retailers report is now easing, also likely played a role in the downturn.

Since that report, Publix has announced a few notable initiatives, including online ordering and delivery chain-wide through Instacart. The retailer, which operates 1,150 stores across eight states, also announced it would build a new Greenwise natural and organic store in Tallahassee, Florida — its first new Greenwise built in a decade and a sign that the company sees growth potential in small format, natural-and-organic retailing.

Despite its healthy numbers, Publix did note an 8% decline in its stock price to $36.05 per share. Unlike publicly traded companies, Publix’s share price is based on independent auditors’ evaluations of the company. Their assessment, which amounts to the sixth decline in the stock price during the past seven quarters, likely reflects the competitive landscape in which Publix is operating, along with recent developments like Amazon’s $13.7 acquisition offer for Whole Foods. The retailer’s stock price peaked in March 2016, according to the Orlando Sentinel, at $45.20.   

Publix, long a fan favorite in its home state, is at a very important point in its evolution. In Florida, where it has a history of facing off against weaker conventional grocers, Publix now faces a new and diverse crop of competitors. This includes hard discounter Aldi, low-price natural and organic retailers like Lucky’s and Sprouts Farmers Market – and, of course, Walmart, which recently took share away from Publix in central Florida and may become a more direct competitor as it remodels stores and ramps up its e-commerce platform.

At the same time, Publix is expanding northward into crowded markets where its name doesn’t hold as much clout as it does back home. Beginning in 2014, Publix made a push into North Carolina, where it now operates close to 30 stores, and just this month it opened the first of 10 planned stores in the highly competitive Richmond, Virginia market. In this Mid-Atlantic region, Publix goes up against numerous strong players, including Wegmans, Lidl, Kroger and Kroger-owned Harris Teeter.

This dual-front challenge will test Publix. But analysts interviewed by Food Dive predict the company will continue to profit by continuing to do what it’s always done: provide exceptional service and execution.

"Overall, Publix is set up very nicely right now and should expect some nice returns long term," grocery analyst David Livingtson recently told Food Dive.