Roundy's (RNDY)

Roundy's (NYSE:RNDY) is a midwest based grocery chain. The company owns a series of grocery stores, particularly in Wisconsin, which it operates under various names. In addition to offering grocery, deli, prepared foods, and bakery products, Roundy's operates pharmacies within many of its stores. The company offers a wide range of products and services and aims to be a "one stop shop." Roundy's plan to enter the Chicago market as it expands.^[1]

Business Overview

For the full year 2010, Roundy's reported a net sales of $3.8B. This resulted in a net income of $46M. For the previous year, the company reported a net sales of $3.7B and a net income of $47M. ^[2]

New Updates

The company's initial public offering of stock on the NYSE occurred on February 7, 2012. The company offered 19.2M shares each for $8.50. This was below the $10-$12 initial price range. Roundy's had originally planned to sell 18.2M shares at its initial price range, but increased this to 19.2M. The deal raised a total of $xxM. The lead mangers of the deal were Credit Suisse, J P Morgan Chase (JPM), and Jefferies.^[3]

Trends & Forces

Entrance into Chicago

In order to grow, Roundy's plans to enter into the Chicago market. However, this market is relatively different from the rest of the midwest where it operates. In addition to higher real estate costs and greater zoning regulation, Roundy's faces more competition from other grocery stores. As a result, while entering Chicago is a large growth opportunity, it also poses as a large risk to the company. ^[4][5]

1. ↑ RNDY S-1/A 2012 PROSPECTUS SUMMARY "Our Company" pg 1-3
2. ↑ RNDY S-1/A 2012 PROSPECTUS SUMMARY "SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA" pg 10
3. ↑ Renaissance Capital - IPO Home "Roundy's prices upsized IPO at $8.50, below the range" 8 Feb 2012
4. ↑ RNDY S-1/A 2012 PROSPECTUS SUMMARY "Our Company" pg 1-3
5. ↑ Seeking Alpha "Roundy's: A Small Midwestern Grocer With Huge Potential Upside" 23 Feb 2012