Retail

Whole Foods Earnings Better Than Organic (WFMI)

money-stack-imageWhole Foods Market, Inc. (NASDAQ: WFMI) has reported that sales for the last quarter rose by 2% to $1.878 billion, although comparable store sales decreased 2.5% versus a 2.6% increase in the prior year. Income from operations increased 23% to $78.9 million. The Company’s effective tax rate was 41.0%, income available to common shareholders was $35.0 million, and diluted earnings per share were $0.25 after a $0.02 accounting credit (LIFO).  Thomson Reuters had estimates pegged at $0.20 EPS and $1.86 billion in revenues.

It said that identical sales excluding nine relocations and two closures fell by 3.8%.  But the company did give one figure that helps the green shoots crowd: it saw its first sequential improvement in comparable store and identical store sales trends in six quarters driven by both average transaction count and basket size trends.

For the first four weeks of the fourth quarter ended August 2, 2009, comparable store sales decreased 1.1%, and identical store sales decreased 2.7%.

It is sticking with conservative forecasts: If comparable and identical store sales in the fourth quarter are in line with its the current quarter trends, then the total sales growth would be approximately 2.9% for the fourth quarter and approximately 1% for the fiscal year.

No long-term guidance was offered, although it did give new total openings forecasts… 16 openings in 4 new markets in FY-2010, 18 new opens and 0 new markets in FY-2011, 12 new opens in 1 new market in FY-2012, and 7 new opens in 3 new markets in FY-2013.

Shares are trading up substantially after the earnings report.  We had a very small gain to $24.82 in regular trading, and the after-hours session has shares trading up around $27.75.  That would mark a 52-week high above the $25.14 level, but this was a $50.00 stock in late 2007.

JON C. OGG
AUGUST 4, 2009

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