Whole Foods Issues Tepid Outlook As Sales Growth Slows

   (FROM THE WALL STREET JOURNAL 11/5/15) 
   By Ilan Brat

Whole Foods Market Inc. said sales growth slowed sharply in the latest quarter and issued a tepid outlook for the current fiscal year, highlighting concerns about the upscale grocer's operations as it works to beat back rising competition.

The Austin, Texas, company said Wednesday that sales at established stores fell 0.2% from a year earlier, while total sales increased 6% -- its weakest results since at least 2010. The number of transactions declined 0.8% in the quarter versus the prior year, in a sign of how rivals are challenging Whole Foods' dominance of selling organic and natural items.

Smaller imitators and large mainstream retailers such as Kroger Co. and Costco Wholesale Corp. are stocking more organic and natural items, hampering Whole Foods' growth in the past two years. Customers increasingly can find what used to be considered specialized items at their neighborhood grocer.

At the same time, a series of operational missteps in recent months have dented Whole Foods' reputation.

The company has been working to lower prices, an effort that executives said would help invigorate traffic. But so far it hasn't paid off, and the company said it is going to invest more to reduce prices, launch additional marketing campaigns and improve the cleanliness and orderliness of stores.

For the quarter ended Sept. 27, Whole Foods reported a profit of $56 million, or 16 cents a share, compared with $128 million, or 35 cents a share, a year earlier. Revenue rose 5.6% to $3.44 billion.

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(END) Dow Jones Newswires

November 05, 2015 02:47 ET (07:47 GMT)

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