Whole Foods Market, Inc. (NASDAQ:WFM) today reported results for
the 16-week first quarter ended January 17, 2016. For the
quarter, total sales increased 3% to a record $4.8 billion.
Comparable store sales on a constant currency basis decreased 1.8%.
Earnings before interest, taxes, depreciation and amortization
(“EBITDA”) were $399 million, or 8.3% of sales, diluted earnings
per share were $0.46, and adjusted return on invested capital was
14%.
“We delivered record sales of $4.8 billion this
quarter and are pleased with the progress we have made on our
nine-point plan outlined in November,” said Walter Robb, co-chief
executive officer of Whole Foods Market. “We improved our cost
structure, stepped up our value efforts, and are excited to
announce today the national launch of digital coupons within our
mobile app. We believe we will deliver strong returns to
shareholders over the long term as we improve our price perception,
better communicate our higher quality standards and
differentiation, and continue to fundamentally evolve our
business.”
During the quarter, the Company produced $232
million in cash flow from operations, invested $179 million in
capital expenditures, returned $45 million in quarterly dividends
to shareholders, and repurchased $634 million or 21.2 million
shares of common stock. On December 3, 2015, the Company completed
its previously announced offering of $1.0 billion of 5.2% senior
notes due 2025, ending the quarter with $1.1 billion in total debt
and $1.4 billion in total available capital. Subsequent to the end
of the quarter, the Company repurchased $100 million or 3.5 million
shares of common stock.
The following table provides information on the
Company’s comparable store sales trends on a one and two-year basis
for the first quarter and for the first three weeks of the 12-week
second quarter. Sales of a store are deemed comparable commencing
in the 57th full week after the store was opened or acquired and
are presented on a constant currency basis. Companies define
comparable store sales differently; thus, growth rates across
companies may not be comparable.
|
Comps |
|
Two-Year |
|
Change inTransactions |
|
Two-Year |
|
Change inBasket Size |
|
Two-Year |
Q4 ended September 27,
2015 |
(0.2 |
)% |
|
2.9 |
% |
|
(0.8 |
)% |
|
0.5 |
% |
|
0.6 |
% |
|
2.4 |
% |
Q1 ended January 17,
2016 |
(1.8 |
)% |
|
2.9 |
% |
|
(1.6 |
)% |
|
0.7 |
% |
|
(0.2 |
)% |
|
2.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Q1 - first five weeks
ended November 1, 2015 |
(2.1 |
)% |
|
2.7 |
% |
|
(1.9 |
)% |
|
0.4 |
% |
|
(0.2 |
)% |
|
2.3 |
% |
Q1 - last eleven weeks
ended January 17, 2016 |
(1.6 |
)% |
|
2.9 |
% |
|
(1.4 |
)% |
|
1.0 |
% |
|
(0.2 |
)% |
|
1.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Q2 - first three weeks
ended February 7, 2016 |
(2.8 |
)% |
* |
2.3 |
% |
|
|
|
|
|
|
|
|
*Reflects
a net negative impact from weather events in both years. |
Gross margin declined 83 basis points to 34.0%
of sales due primarily to an increase in cost of goods sold as a
percentage of sales. LIFO was $2 million versus $3 million, a
positive impact of three basis points year over year.
SG&A improved four basis points to 28.4% of
sales. Leverage in salaries and benefits and marketing costs was
partially offset by higher depreciation and technology investments
as a percentage of sales.
Reflecting the Company’s issuance of $1.0
billion in senior notes, net interest expense was $3 million in the
current year versus net investment income of $3 million in the
prior year.
The effective tax rate was 37.0% versus 39.0% in
the prior year due to a significant environmental tax credit
related to the development of a new store.
Comparable store sales growth by age class for
the trailing four quarters is provided in the following table.
|
|
TrailingFour-Quarter Comps |
|
# of Stores |
|
% of Square Footage |
|
Average Age(s.f. weighted) |
> 11 years |
|
(0.5 |
)% |
|
183 |
|
37 |
% |
|
18
years |
5 to 11 years |
|
(0.6 |
)% |
|
105 |
|
34 |
% |
|
8
years |
< 5
years |
|
4.9 |
% |
|
116 |
|
29 |
% |
|
3 years |
All comparable
stores |
|
0.5 |
% |
|
404 |
|
100 |
% |
|
10
years |
Growth and DevelopmentIn the
first quarter, the Company opened three new stores. In the second
quarter, the Company has opened two new stores and expects to open
six additional stores.
The Company recently signed six new leases for
one Whole Foods Market and five 365 by Whole Foods Market stores.
The Whole Foods Market lease is 40,000 square feet and located in
San Diego, CA. The 365 leases average 30,000 square feet and are
located in Claremont, CA; Concord, CA; Los Alamitos, CA;
Gainesville, FL; and Evergreen Park, IL.
The Company sees potential for 1,200 Whole Foods
Market stores in the United States, with the new 365 format
expanding the growth opportunity beyond 1,200 stores. The following
table provides additional information about the Company’s new and
acquired stores and development pipeline for Whole Foods Market and
365 stores scheduled to open through fiscal year 2021.
|
|
|
|
|
|
Current Leases Signed: |
New Store
Information |
|
FY15 |
|
FY16 YTD |
|
365 |
WFM |
Total |
Number of stores
(including relocations) |
|
38 |
|
|
5 |
|
|
13 |
|
101 |
|
114 |
|
Relocations |
|
6 |
|
|
0 |
|
|
0 |
|
16 |
|
16 |
|
Percentage in new
markets |
|
11 |
% |
|
20 |
% |
|
15 |
% |
22 |
% |
21 |
% |
Total square footage |
|
1,653,000 |
|
|
219,000 |
|
|
380,000 |
|
4,479,000 |
|
4,859,000 |
|
Fiscal Year 2016 OutlookThe
Company remains focused on the metrics it believes are key to the
long-term health of its business and is targeting:
- Sales growth of 3% to 5%
- Approximately 30 new stores, including three 365 stores and two
to three relocations
- Square footage growth of 7% or greater
- EBITDA margin of approximately 8.5%
- Capital expenditures of 5% of sales
- ROIC greater than 13.5%
The Company’s results are highly dependent on
comps, which have been particularly difficult to predict in this
competitive landscape. The Company is hopeful that comps will
improve over the course of the year as comparisons get easier and
sales-building initiatives gain traction; however, there could be
some offsetting impact from a ramp up in price investments and
promotions throughout the year. The 3% to 5% sales outlook for the
year reflects comps of -2% to 0%.
Based on year-to-date results, the Company now
expects a decline in operating margin for the fiscal year of up to
70 basis points from the 6.1% reported last year excluding fourth
quarter charges. Reflecting increased value efforts as the year
progresses, the year-over-year decline in gross margin, excluding
LIFO, in Q2 through Q4 is expected to be greater than the 86 basis
point decline in Q1. The Company expects year-over-year SG&A
leverage to increase sequentially over the next three quarters
reflecting the positive impact of cost-saving initiatives net of
higher depreciation and other costs. For the remainder of the year,
interest expense is expected to be approximately $38 million, and
the effective tax rate is expected to be 39.0%. Excluding
$0.02 to $0.05 per diluted share in estimated net accretion related
to debt-financed buybacks, the Company expects diluted earnings per
share for the fiscal year of $1.53 or greater, implying $1.07 or
greater for the remainder of the year.
The Company’s 365 store openings are expected as
follows: Silver Lake, CA in late May; Lake Oswego, OR in July; and
Bellevue, WA in August.
SeasonalityThe Company notes
that average weekly sales and gross profit as a percentage of sales
are typically highest in the second and third fiscal quarters, and
lowest in the fourth fiscal quarter due to seasonally slower sales
during the summer months. Gross profit as a percentage of sales
also is typically lower in the first fiscal quarter due to the
product mix of holiday sales. The Company notes Easter falls in the
second quarter in both this year and the prior year.
About Whole Foods MarketFounded
in 1978 in Austin, Texas, Whole Foods Market is the leading natural
and organic foods supermarket, the first national “Certified
Organic” grocer, and uniquely positioned as America’s Healthiest
Grocery Store™. In fiscal year 2015, the Company had sales of
approximately $15 billion and currently has 436 stores in the
United States, Canada, and the United Kingdom. Whole Foods Market
employs approximately 85,000 team members and has been ranked for
18 consecutive years as one of the “100 Best Companies to Work For”
in America by Fortune magazine. For more information, please visit
www.wholefoodsmarket.com.
Disclaimer on Forward-looking
StatementsCertain statements in this press release and
from time to time in other filings with the Securities and Exchange
Commission, news releases, reports, and other written and oral
communications made by us and our representatives, constitute
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are often identified by words such as “anticipate,”
“believe,” “estimate,” “expect,” “continue,” “could,” “can,” “may,”
“will,” “likely,” “depend,” “should,” “would,” “plan,” “predict,”
“target,” and similar expressions, and include references to
assumptions and relate to our future prospects, developments and
business strategies. Except for the historical information
contained herein, the matters discussed in this press release are
forward-looking statements that are based on the Company’s current
assumptions and involve risks and uncertainties that may cause our
actual results to be materially different from such forward-looking
statements and could materially adversely affect our business,
financial condition, operating results and cash flows. These
forward-looking statements may include comments relating to, among
other things, future earnings per share and the Company’s intention
to obtain additional debt in the near term and to make planned
share repurchases, some of which are subject to risks and
uncertainties relating to general business conditions, conditions
in the credit and capital markets, changes in overall economic
conditions that impact consumer spending, including fuel prices and
housing market trends, the impact of competition and other factors
which are often beyond the control of the Company, as well other
risks listed in the Company’s Annual Report on Form 10-K for the
fiscal year ended September 27, 2015, and other risks and
uncertainties not presently known to us or that we currently deem
immaterial. We wish to caution you that you should not place undue
reliance on such forward-looking statements, which speak only as of
the date on which they were made. We do not undertake any
obligation to update forward-looking statements.
The Company will host a conference call today to
discuss this earnings announcement at 4:00 p.m. CT. The dial-in
number is (888) 632-3384, and the conference ID is “Whole Foods.” A
simultaneous audio webcast will be available at
www.wholefoodsmarket.com/company-info/investor-relations.
|
|
|
|
Whole Foods Market, Inc. |
|
|
|
Consolidated Statements of Operations
(unaudited) |
|
|
|
(In
millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
16 weeks ended |
|
|
January 17, 2016 |
January 18, 2015 |
Sales |
|
$ |
4,829 |
|
$ |
4,671 |
|
Cost of
goods sold and occupancy costs |
|
|
3,188 |
|
|
3,045 |
|
Gross profit |
|
|
1,641 |
|
|
1,626 |
|
Selling, general and administrative expenses |
|
|
1,373 |
|
|
1,330 |
|
Operating income before pre-opening
and store closure |
|
|
268 |
|
|
296 |
|
Pre-opening expenses |
|
|
13 |
|
|
21 |
|
Relocation, store closure and lease termination costs |
|
|
3 |
|
|
4 |
|
Operating income |
|
|
252 |
|
|
271 |
|
Interest
expense |
|
|
(7 |
) |
|
- |
|
Investment and other income |
|
|
4 |
|
|
3 |
|
Income before income taxes |
|
|
249 |
|
|
274 |
|
Provision
for income taxes |
|
|
92 |
|
|
107 |
|
Net income |
|
$ |
157 |
|
$ |
167 |
|
|
|
|
|
Basic earnings per share |
|
$ |
0.47 |
|
$ |
0.46 |
|
Weighted average shares
outstanding |
|
|
337.0 |
|
|
359.9 |
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.46 |
|
$ |
0.46 |
|
Weighted average shares
outstanding, diluted basis |
|
|
338.2 |
|
|
362.2 |
|
|
|
|
|
Dividends declared per common
share |
|
$ |
0.135 |
|
$ |
0.130 |
|
|
|
|
|
|
|
|
|
A reconciliation of the
numerators and denominators of the basic and diluted earnings per
share calculations follows: |
|
|
|
|
|
16 weeks ended |
|
|
January 17,
2016 |
January 18,
2015 |
Net income |
|
|
|
(numerator for basic and diluted
earnings per share) |
|
$ |
157 |
|
$ |
167 |
|
Weighted average common
shares outstanding |
|
|
|
(denominator for basic
earnings per share) |
|
|
337.0 |
|
|
359.9 |
|
Incremental common shares
attributable to dilutive effect of share-based awards |
|
|
1.2 |
|
|
2.3 |
|
Weighted average common
shares outstanding and |
|
|
|
potential additional
common shares outstanding |
|
|
|
(denominator for diluted earnings
per share) |
|
|
338.2 |
|
|
362.2 |
|
|
|
|
|
Basic earnings per share |
|
$ |
0.47 |
|
$ |
0.46 |
|
Diluted earnings per share |
|
$ |
0.46 |
|
$ |
0.46 |
|
Whole Foods Market, Inc. |
|
|
Consolidated Statements of Comprehensive Income
(unaudited) |
|
|
(In
millions) |
|
|
|
|
|
|
16 weeks ended |
|
January 17, 2016 |
January 18, 2015 |
Net
income |
$ |
157 |
|
$ |
167 |
|
Other
comprehensive loss, net of tax: |
|
|
Foreign currency translation
adjustments |
|
(10 |
) |
|
(11 |
) |
Other comprehensive loss, net of tax |
|
(10 |
) |
|
(11 |
) |
Comprehensive income |
$ |
147 |
|
$ |
156 |
|
Whole Foods Market, Inc. |
|
|
Consolidated Balance Sheets (unaudited) |
|
|
(In
millions) |
|
|
|
|
|
|
|
|
Assets |
January 17, 2016 |
September 27, 2015 |
Current assets: |
|
|
Cash and cash equivalents |
$ |
679 |
|
$ |
237 |
|
Short-term investments -
available-for-sale securities |
|
130 |
|
|
155 |
|
Restricted cash |
|
126 |
|
|
127 |
|
Accounts receivable |
|
212 |
|
|
218 |
|
Merchandise inventories |
|
564 |
|
|
500 |
|
Prepaid expenses and other current
assets |
|
115 |
|
|
108 |
|
Deferred
income taxes |
|
192 |
|
|
199 |
|
Total current assets |
|
2,018 |
|
|
1,544 |
|
Property and equipment,
net of accumulated depreciation and amortization |
|
3,201 |
|
|
3,163 |
|
Long-term investments -
available-for-sale securities |
|
- |
|
|
63 |
|
Goodwill |
|
710 |
|
|
710 |
|
Intangible assets, net of accumulated amortization |
|
79 |
|
|
79 |
|
Deferred
income taxes |
|
185 |
|
|
144 |
|
Other assets |
|
43 |
|
|
38 |
|
Total assets |
$ |
6,236 |
|
$ |
5,741 |
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
Current
liabilities: |
|
|
Current installments of long-term
debt and capital lease obligations |
$ |
3 |
|
$ |
3 |
|
Accounts payable |
|
278 |
|
|
295 |
|
Accrued payroll, bonus and other
benefits due team members |
|
411 |
|
|
436 |
|
Dividends payable |
|
44 |
|
|
45 |
|
Other current
liabilities |
|
502 |
|
|
473 |
|
Total current liabilities |
|
1,238 |
|
|
1,252 |
|
Long-term debt and
capital lease obligations, less current installments |
|
1,052 |
|
|
62 |
|
Deferred lease
liabilities |
|
597 |
|
|
587 |
|
Other long-term liabilities |
|
87 |
|
|
71 |
|
Total liabilities |
|
2,974 |
|
|
1,972 |
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
Shareholders’ equity: |
|
|
Common
stock, no par value, 1,200 shares authorized; |
|
|
377.1 shares issued; 328.0 and
348.9 shares outstanding |
|
|
at 2016 and 2015, respectively |
|
2,917 |
|
|
2,904 |
|
Common
stock in treasury, at cost, 49.1 and 28.2 shares at 2016 and 2015,
respectively |
|
(1,747 |
) |
|
(1,124 |
) |
Accumulated other comprehensive loss |
|
(38 |
) |
|
(28 |
) |
Retained earnings |
|
2,130 |
|
|
2,017 |
|
Total shareholders’
equity |
|
3,262 |
|
|
3,769 |
|
Total liabilities and
shareholders’ equity |
$ |
6,236 |
|
$ |
5,741 |
|
Whole Foods Market, Inc. |
|
|
Consolidated Statements of Cash Flows
(unaudited) |
|
|
(In
millions) |
|
|
|
|
|
|
16 weeks ended |
|
January 17, 2016 |
January 18, 2015 |
Cash flows from operating activities |
|
|
Net
income |
$ |
157 |
|
$ |
167 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
Depreciation and amortization |
|
147 |
|
|
125 |
|
Share-based payment expense |
|
16 |
|
|
19 |
|
LIFO expense |
|
2 |
|
|
3 |
|
Deferred income tax benefit |
|
(30 |
) |
|
(2 |
) |
Excess tax benefit related to
exercise of team member stock options |
|
(1 |
) |
|
(4 |
) |
Accretion of premium/discount on
marketable securities |
|
1 |
|
|
6 |
|
Deferred lease liabilities |
|
8 |
|
|
11 |
|
Other |
|
2 |
|
|
3 |
|
Net change in current assets and
liabilities: |
|
|
Accounts receivable |
|
6 |
|
|
(6 |
) |
Merchandise inventories |
|
(67 |
) |
|
(53 |
) |
Prepaid expenses and other current
assets |
|
(7 |
) |
|
9 |
|
Accounts payable |
|
(16 |
) |
|
5 |
|
Accrued payroll, bonus and other
benefits due team members |
|
(25 |
) |
|
17 |
|
Other current liabilities |
|
28 |
|
|
87 |
|
Net change in other long-term
liabilities |
|
11 |
|
|
- |
|
Net cash provided by
operating activities |
|
232 |
|
|
387 |
|
Cash flows from investing activities |
|
|
Development costs of new locations |
|
(91 |
) |
|
(152 |
) |
Other
property and equipment expenditures |
|
(88 |
) |
|
(100 |
) |
Purchases of available-for-sale securities |
|
(133 |
) |
|
(171 |
) |
Sales
and maturities of available-for-sale securities |
|
220 |
|
|
199 |
|
Decrease
(increase) in restricted cash |
|
1 |
|
|
(21 |
) |
Payment
for purchase of acquired entities, net of cash acquired |
|
(11 |
) |
|
(4 |
) |
Other investing activities |
|
(6 |
) |
|
(2 |
) |
Net cash used in investing
activities |
|
(108 |
) |
|
(251 |
) |
Cash flows from financing activities |
|
|
Purchases of treasury stock |
|
(634 |
) |
|
(43 |
) |
Common
stock dividends paid |
|
(45 |
) |
|
(43 |
) |
Issuance
of common stock |
|
7 |
|
|
23 |
|
Excess
tax benefit related to exercise of team member stock options |
|
1 |
|
|
4 |
|
Proceeds
from long-term borrowings |
|
999 |
|
|
- |
|
Proceeds
from revolving line of credit |
|
300 |
|
|
- |
|
Payments
on long-term debt and capital lease obligations |
|
(302 |
) |
|
- |
|
Other financing activities |
|
(7 |
) |
|
- |
|
Net cash provided by (used
in) financing activities |
|
319 |
|
|
(59 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(1 |
) |
|
(1 |
) |
Net
change in cash and cash equivalents |
|
442 |
|
|
76 |
|
Cash and cash equivalents at beginning of period |
|
237 |
|
|
190 |
|
Cash and cash equivalents at end
of period |
$ |
679 |
|
$ |
266 |
|
|
|
|
Supplemental disclosure of
cash flow information: |
|
|
Federal and state income
taxes paid |
$ |
137 |
|
$ |
77 |
|
Whole Foods Market, Inc. |
|
|
Non-GAAP Financial Measures (unaudited) |
|
|
(In
millions) |
|
|
|
|
|
In addition to reporting financial results in
accordance with generally accepted accounting principles, or GAAP,
the Company provides information regarding Earnings Before
Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted
EBITDA and Free Cash Flow in the press release as additional
information about its operating results. These measures are
not in accordance with, or an alternative to, GAAP. The
Company’s management believes that these presentations provide
useful information to management, analysts and investors regarding
certain additional financial and business trends relating to its
results of operations and financial condition. In addition,
management uses these measures for reviewing the financial results
of the Company as well as a component of incentive
compensation. |
|
|
|
The Company defines Adjusted EBITDA as EBITDA plus
non-cash share-based payment expense and deferred rent. The
following is a tabular reconciliation of the non-GAAP financial
measure Adjusted EBITDA to GAAP net income, which the Company
believes to be the most directly comparable GAAP financial
measure. |
|
|
|
|
16 weeks ended |
EBITDA and Adjusted
EBITDA |
January 17, 2016 |
January 18, 2015 |
Net
income |
$ |
157 |
|
$ |
167 |
|
Provision for income
taxes |
|
92 |
|
|
107 |
|
Interest expense |
|
7 |
|
|
- |
|
Investment and other income |
|
(4 |
) |
|
(3 |
) |
Operating income |
|
252 |
|
|
271 |
|
Depreciation and amortization |
|
147 |
|
|
125 |
|
EBITDA |
|
399 |
|
|
396 |
|
Share-based payment
expense |
|
16 |
|
|
19 |
|
Deferred rent |
|
12 |
|
|
13 |
|
Adjusted EBITDA |
$ |
427 |
|
$ |
428 |
|
|
|
|
|
|
|
The Company defines Free Cash Flow as net cash provided
by operating activities less capital expenditures. The following is
a tabular reconciliation of the Free Cash Flow non-GAAP financial
measure. |
|
|
|
|
16 weeks ended |
Free Cash
Flow |
January 17, 2016 |
January 18, 2015 |
Net cash
provided by operating activities |
$ |
232 |
|
$ |
387 |
|
Development costs of new locations |
|
(91 |
) |
|
(152 |
) |
Other property and equipment expenditures |
|
(88 |
) |
|
(100 |
) |
Free Cash Flow |
$ |
53 |
|
$ |
135 |
|
Whole Foods Market, Inc. |
|
|
Non-GAAP Financial Measures (unaudited) |
|
|
(In
millions) |
|
|
|
|
|
In addition to reporting financial results in
accordance with generally accepted accounting principles, or GAAP,
the Company provides information regarding Return on Invested
Capital (“ROIC”) and Adjusted ROIC as additional information about
its operating results. These measures are not in accordance
with, or an alternative to, GAAP. The Company’s management
believes this presentation provides useful information to
management, analysts and investors regarding certain additional
financial and business trends relating to its results of operations
and financial condition. In addition, management uses this
measure for reviewing the financial results of the Company as well
as a component of incentive compensation. The Company defines
ROIC as ROIC earnings divided by average invested capital.
ROIC earnings and adjustments to ROIC earnings are defined in the
following tabular reconciliation. Invested capital reflects a
trailing four-quarter average. |
|
|
|
|
52 weeks ended |
ROIC |
January 17, 2016 |
January 18, 2015 |
Net income |
$ |
525 |
|
$ |
588 |
|
Interest expense, net of tax |
|
4 |
|
|
- |
|
ROIC earnings |
|
529 |
|
|
588 |
|
Total
rent expense, net of tax1 |
|
268 |
|
|
251 |
|
Estimated depreciation on capitalized operating leases, net of
tax2 |
|
(178 |
) |
|
(167 |
) |
ROIC earnings, including the
effect of capitalized operating leases |
$ |
619 |
|
$ |
672 |
|
|
|
|
Average working
capital, excluding current portion of long-term debt |
$ |
529 |
|
$ |
662 |
|
Average property and
equipment, net |
|
3,121 |
|
|
2,789 |
|
Average other
assets |
|
1,075 |
|
|
1,105 |
|
Average
other liabilities |
|
(651 |
) |
|
(590 |
) |
Average invested capital |
|
4,074 |
|
|
3,966 |
|
Average estimated asset base of capitalized operating leases3 |
|
3,486 |
|
|
3,278 |
|
Average invested capital,
including the effect of capitalized operating leases |
$ |
7,560 |
|
$ |
7,244 |
|
|
|
|
ROIC |
|
13.0 |
% |
|
14.8 |
% |
ROIC, including the effect of
capitalized of operating leases |
|
8.2 |
% |
|
9.3 |
% |
|
|
|
|
|
|
Adjusted
ROIC |
|
|
Net income |
$ |
525 |
|
$ |
588 |
|
Interest expense, net
of tax |
|
4 |
|
|
- |
|
Adjustments, net of tax4 |
|
48 |
|
|
1 |
|
Adjusted ROIC earnings |
|
577 |
|
|
589 |
|
Total
rent expense, net of tax1 |
|
268 |
|
|
251 |
|
Estimated depreciation on capitalized operating leases, net of
tax2 |
|
(178 |
) |
|
(167 |
) |
Adjusted ROIC earnings,
including the effect of capitalized operating leases |
$ |
667 |
|
$ |
673 |
|
|
|
|
Average working
capital, excluding current portion of long-term debt |
$ |
529 |
|
$ |
662 |
|
Average property and
equipment, net |
|
3,121 |
|
|
2,789 |
|
Average other
assets |
|
1,075 |
|
|
1,105 |
|
Average
other liabilities |
|
(651 |
) |
|
(590 |
) |
Average invested capital |
|
4,074 |
|
|
3,966 |
|
Average estimated asset base of capitalized operating leases3 |
|
3,486 |
|
|
3,278 |
|
Average invested capital,
including the effect of capitalized operating leases |
$ |
7,560 |
|
$ |
7,244 |
|
|
|
|
Adjusted ROIC |
|
14.2 |
% |
|
14.9 |
% |
Adjusted ROIC, including the
effect of capitalized operating leases |
|
8.8 |
% |
|
9.3 |
% |
|
|
|
1 Total rent includes
minimum base rent of all tendered leases |
|
|
2
Estimated depreciation equals two-thirds of total rent expense |
|
|
3
Estimated asset base equals eight times total rent expense |
|
|
4 Adjustments include
non-cash asset impairment charges and Q4 2015 restructuring
charge |
|
|
Investor Relations Contact:
Cindy McCann
VP of Investor Relations
512.542.0204
Media Contact:
Robin Kelly
Robin.Kelly@wholefoods.com
617.417.3895
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