Company Produces Record Sales and Delivers EPS of
$0.37;Company Provides Fourth Quarter Guidance
Whole Foods Market, Inc. (NASDAQ:WFM) today reported results for
the 12-week third quarter ended July 3, 2016. For the
quarter, total sales increased to a record $3.7 billion.
Comparable store sales decreased 2.6%. Net income was $120
million, or 3.2% of sales, and diluted earnings per share were
$0.37. Earnings before interest, taxes, depreciation and
amortization (“EBITDA”) were $326 million, or 8.8% of sales, and
adjusted return on invested capital was 13.0%. Please refer
to the reconciliation of GAAP measures to non-GAAP measures at the
end of this release.
During the quarter, the Company produced $189
million in cash flow from operations, returned $44 million in
quarterly dividends to shareholders, and repurchased $195 million
or 6.5 million shares of common stock. The Company ended the
quarter with $1.1 billion of total debt and $1.1 billion of total
available capital.
“We delivered record sales of $3.7 billion this
quarter along with a sequential improvement in our comparable store
sales trends,” said Walter Robb, co-chief executive officer of
Whole Foods Market. “We are continuing to make measurable progress
on fundamentally evolving our business including the successful
launch of our new 365 format, expanded value investments, and
increased efforts to better understand and provide personalized
offers to our customers. We are seeing some encouraging signs in
terms of our sales and believe our nine-point plan will produce
strong returns for our shareholders over the long term.”
“Just two weeks ago, we opened our second 365 by
Whole Foods Market store. Designed around affordability and
convenience and supported by enhanced digital experiences, our
365 stores deliver a fresh new format to the marketplace.
Through lower capital and operating costs, we are able to offer
great values to our customers, and the response has been
overwhelmingly positive,” said John Mackey, co-founder and co-chief
executive officer of Whole Foods Market. “Our 365 stores are
firsts for us in so many ways, from a streamlined operating model,
to centralized buying, to auto-replenishment of inventory. We
are already taking advantage of our many learnings to shape and
evolve not just future 365 stores but Whole Foods Market stores as
well.”
The following table provides information on the
Company’s comparable store sales trends for the third quarter and
for the first three weeks of the 12-week fourth quarter.
Results for the three-week period reflect the most recent data
available but represent a short period of time and may not be
indicative of results for the full quarter.
|
Comps |
|
Change inTransactions |
|
Change in Basket Size |
|
Q3 ended July 3,
2016 |
(2.6 |
)% |
|
(2.7 |
)% |
|
0.1 |
%* |
|
Q4 through July 24,
2016 |
(2.4 |
)% |
|
|
|
|
|
*A decline in average price per item was more than offset by an
increase in items per basket.
Gross margin declined 89 basis points to 34.7%
driven by an increase in cost of goods sold as a percentage of
sales, primarily reflecting the Company’s value efforts. LIFO
was a $2 million credit in the current year versus no charge last
year, a positive impact of five basis points year over year.
SG&A increased 11 basis points to 28.5% of
sales. An 82 basis point improvement in wages was more than
offset by higher healthcare, depreciation, marketing and technology
expenses as a percentage of sales. Higher-than-expected
healthcare expenses were due to an increase in catastrophic claims
and costs for certain prescription medicines.
Comparable store sales by age class for the trailing four
quarters are provided in the following table.
|
|
TrailingFour-Quarter Comps |
|
# of Stores |
|
% of SquareFootage |
|
Average Age(s.f. weighted) |
> 11 years |
|
(2.7 |
)% |
|
189 |
|
38 |
% |
|
17.7
years |
5 to 11 years |
|
(2.9 |
)% |
|
107 |
|
33 |
% |
|
8.0
years |
< 5
years |
|
1.5 |
% |
|
124 |
|
30 |
% |
|
2.7 years |
All comparable
stores |
|
(1.9 |
)% |
|
420 |
|
100 |
% |
|
9.9
years |
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date ResultsFor the
40-week period ended July 3, 2016, total sales increased 2.3%
to $12.2 billion. Comparable store sales decreased
2.4%. Average weekly sales per store were $695,000,
translating to sales per gross square foot of approximately
$935. Net income was $419 million, or 3.4% of sales, diluted
earnings per share were $1.27, and EBITDA was $1.1 billion, or 8.8%
of sales.
Year to date, the Company has produced $764
million in cash flow from operations, invested $521 million in
capital expenditures, returned $133 million in quarterly dividends
to shareholders, and repurchased $929 million or 31.2 million
shares of common stock.
Growth and DevelopmentIn the
third quarter, the Company opened 12 new stores, including the
first 365 by Whole Foods Market™ store in Silver Lake, CA. In
the fourth quarter, the Company has opened one 365 and two Whole
Foods Market stores and plans to open two additional stores,
including one 365 and one Whole Foods Market store.
The Company recently signed four new leases,
including two relocations, for one 365 and three Whole Foods Market
stores. The new 365 lease is 30,000 square feet and located
in Atlanta, GA. The Whole Foods Market leases average 47,000
square feet and are located in Los Angeles, CA; New York City, NY;
and Pittsburgh, PA.
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 store
openings and leases in development for Whole Foods Market and 365
stores scheduled to open through fiscal year 2021.
|
|
|
|
|
|
Current Leases Signed: |
New Store
Information |
|
FY15 |
|
FY16 YTD |
|
WFM |
365 |
Total |
Number of stores
(including relocations) |
|
38 |
|
|
26 |
|
|
86 |
|
20 |
|
106 |
|
Relocations |
|
6 |
|
|
2 |
|
|
17 |
|
0 |
|
17 |
|
Percentage in new
markets |
|
11 |
% |
|
23 |
% |
|
16 |
% |
25 |
% |
18 |
% |
Total square footage |
|
1,653,000 |
|
|
1,104,000 |
|
|
3,972,000 |
|
522,000 |
|
4,494,000 |
|
|
|
|
|
|
|
|
|
|
Fourth Quarter OutlookIf
comparable store sales in the fourth quarter are in line with the
2.4% quarter-to-date decrease and healthcare cost trends continue,
the Company would expect sales growth of approximately 2% and
diluted earnings per share of $0.23 to $0.24 for the quarter. While
the Company is hopeful that comps will improve over the remainder
of the quarter as comparisons get easier and sales-building
initiatives gain traction, the Company expects some ongoing
offsetting impact from its value strategy and disinflation. The
Company has opened three new stores and expects to open two
additional stores in the quarter.
The Company notes that average weekly sales and
gross margin are lowest in the fourth fiscal quarter due to
seasonally slower sales during the summer months. In
addition, results in the fourth quarter of the prior year included
asset impairment and restructuring charges of $80 million and a
LIFO credit of $2 million.
The Company expects ending square footage growth
of approximately 7% for fiscal year 2016 and 6% for fiscal year
2017. The Company will provide other fiscal year 2017 targets
next quarter.
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 455 stores in the
United States, Canada, and the United Kingdom. Whole Foods
Market employs approximately 87,000 team members and has been
ranked for 19 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 Quarterly Report on Form 10-Q for the second quarter ended
April 10, 2016, 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 (800) 862-9098, and the conference ID is “Whole
Foods.” A simultaneous audio webcast will be available at
www.investor.wholefoodsmarket.com.
|
|
|
|
|
|
|
|
Whole Foods Market, Inc. |
|
|
|
|
|
|
|
Consolidated Statements of Operations
(unaudited) |
|
|
|
|
|
|
|
(In millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 weeks ended |
|
40 weeks ended |
|
|
|
July 3, 2016 |
|
July 5, 2015 |
|
July 3, 2016 |
|
July 5, 2015 |
Sales |
$ |
3,703 |
|
|
$ |
3,632 |
|
|
$ |
12,227 |
|
|
$ |
11,951 |
|
Cost of goods sold and occupancy costs |
|
2,417 |
|
|
|
2,339 |
|
|
|
8,010 |
|
|
|
7,721 |
|
|
Gross
profit |
|
1,286 |
|
|
|
1,293 |
|
|
|
4,217 |
|
|
|
4,230 |
|
Selling, general and administrative expenses |
|
1,057 |
|
|
|
1,032 |
|
|
|
3,458 |
|
|
|
3,392 |
|
|
Operating
income before pre-opening and store closure |
|
229 |
|
|
|
261 |
|
|
|
759 |
|
|
|
838 |
|
Pre-opening expenses |
|
18 |
|
|
|
12 |
|
|
|
49 |
|
|
|
53 |
|
Relocation, store closure and lease termination
costs |
|
2 |
|
|
|
2 |
|
|
|
8 |
|
|
|
12 |
|
|
Operating
income |
|
209 |
|
|
|
247 |
|
|
|
702 |
|
|
|
773 |
|
Interest expense |
|
(12 |
) |
|
|
- |
|
|
|
(30 |
) |
|
|
- |
|
Investment and other income (expense) |
|
(1 |
) |
|
|
5 |
|
|
|
8 |
|
|
|
12 |
|
|
Income before income taxes |
|
196 |
|
|
|
252 |
|
|
|
680 |
|
|
|
785 |
|
Provision for income taxes |
|
76 |
|
|
|
98 |
|
|
|
261 |
|
|
|
306 |
|
|
Net income |
$ |
120 |
|
|
$ |
154 |
|
|
$ |
419 |
|
|
$ |
479 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.37 |
|
|
$ |
0.43 |
|
|
$ |
1.27 |
|
|
$ |
1.33 |
|
Weighted average shares outstanding |
|
320.6 |
|
|
|
358.5 |
|
|
|
328.4 |
|
|
|
359.6 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
0.37 |
|
|
$ |
0.43 |
|
|
$ |
1.27 |
|
|
$ |
1.32 |
|
Weighted average shares outstanding, diluted basis |
|
321.2 |
|
|
|
360.5 |
|
|
|
329.3 |
|
|
|
362.2 |
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
$ |
0.135 |
|
|
$ |
0.130 |
|
|
$ |
0.405 |
|
|
$ |
0.390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A
reconciliation of the numerators and denominators of the basic and
diluted earnings per share calculations follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
12 weeks ended |
|
40 weeks ended |
|
|
|
July 3, 2016 |
|
July 5, 2015 |
|
July 3, 2016 |
|
July 5, 2015 |
Net
income |
|
|
|
|
|
|
|
(numerator for basic and diluted earnings per
share) |
$ |
120 |
|
|
$ |
154 |
|
|
$ |
419 |
|
|
$ |
479 |
|
Weighted
average common shares outstanding |
|
|
|
|
|
|
|
(denominator for basic earnings per share) |
|
320.6 |
|
|
|
358.5 |
|
|
|
328.4 |
|
|
|
359.6 |
|
|
Incremental
common shares attributable to dilutive effect |
|
|
|
|
|
|
|
|
of share-based awards |
|
0.6 |
|
|
|
2.0 |
|
|
|
0.9 |
|
|
|
2.6 |
|
Weighted
average common shares outstanding and |
|
|
|
|
|
|
|
potential
additional common shares outstanding |
|
|
|
|
|
|
|
(denominator for diluted earnings per share) |
|
321.2 |
|
|
|
360.5 |
|
|
|
329.3 |
|
|
|
362.2 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.37 |
|
|
$ |
0.43 |
|
|
$ |
1.27 |
|
|
$ |
1.33 |
|
Diluted earnings per share |
$ |
0.37 |
|
|
$ |
0.43 |
|
|
$ |
1.27 |
|
|
$ |
1.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Whole Foods Market, Inc. |
|
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income
(unaudited) |
|
|
|
|
|
|
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 weeks ended |
|
40 weeks ended |
|
|
|
July 3, 2016 |
|
July 5, 2015 |
|
July 3, 2016 |
|
July 5, 2015 |
Net income |
$ |
120 |
|
|
$ |
154 |
|
|
$ |
419 |
|
|
$ |
479 |
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments |
|
(1 |
) |
|
|
3 |
|
|
|
(1 |
) |
|
|
(15 |
) |
Other comprehensive income (loss), net of tax |
|
(1 |
) |
|
|
3 |
|
|
|
(1 |
) |
|
|
(15 |
) |
Comprehensive income |
$ |
119 |
|
|
$ |
157 |
|
|
$ |
418 |
|
|
$ |
464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Whole Foods Market, Inc. |
|
|
|
Consolidated Balance Sheets (unaudited) |
|
|
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
July 3, 2016 |
|
September 27, 2015 |
Current
assets: |
|
|
|
|
Cash and cash equivalents |
$ |
472 |
|
|
$ |
237 |
|
|
Short-term investments - available-for-sale securities |
|
153 |
|
|
|
155 |
|
|
Restricted cash |
|
123 |
|
|
|
127 |
|
|
Accounts
receivable |
|
319 |
|
|
|
218 |
|
|
Merchandise
inventories |
|
523 |
|
|
|
500 |
|
|
Prepaid expenses and other current assets |
|
147 |
|
|
|
108 |
|
|
Deferred
income taxes |
|
188 |
|
|
|
199 |
|
|
|
Total current assets |
|
1,925 |
|
|
|
1,544 |
|
Property
and equipment, net of accumulated depreciation and
amortization |
|
3,376 |
|
|
|
3,163 |
|
Long-term
investments - available-for-sale securities |
|
- |
|
|
|
63 |
|
Goodwill |
|
710 |
|
|
|
710 |
|
Intangible assets, net of accumulated amortization |
|
76 |
|
|
|
79 |
|
Deferred income taxes |
|
143 |
|
|
|
144 |
|
Other assets |
|
45 |
|
|
|
38 |
|
|
Total assets |
$ |
6,275 |
|
|
$ |
5,741 |
|
|
|
|
|
|
|
Liabilities and Shareholders’
Equity |
|
|
|
Current
liabilities: |
|
|
|
|
Current installments of long-term debt and capital lease
obligations |
$ |
3 |
|
|
$ |
3 |
|
|
Accounts
payable |
|
292 |
|
|
|
295 |
|
|
Accrued payroll, bonus and other benefits due team members |
|
409 |
|
|
|
436 |
|
|
Dividends payable |
|
43 |
|
|
|
45 |
|
|
Other current liabilities |
|
577 |
|
|
|
473 |
|
|
|
Total
current liabilities |
|
1,324 |
|
|
|
1,252 |
|
Long-term
debt and capital lease obligations, less current installments |
|
1,049 |
|
|
|
62 |
|
Deferred
lease liabilities |
|
626 |
|
|
|
587 |
|
Other
long-term liabilities |
|
91 |
|
|
|
71 |
|
|
Total liabilities |
|
3,090 |
|
|
|
1,972 |
|
|
|
|
|
|
|
Commitments
and contingencies |
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
Common stock, no par value, 1,200 shares authorized; |
|
|
|
|
377.0 and 377.1 shares issued; 318.8 and 348.9 shares
outstanding |
|
|
|
|
at 2016 and 2015, respectively |
|
2,924 |
|
|
|
2,904 |
|
Common stock in treasury, at cost, 58.2 and 28.2 shares at 2016
and 2015, respectively |
|
(2,014 |
) |
|
|
(1,124 |
) |
Accumulated other comprehensive loss |
|
(29 |
) |
|
|
(28 |
) |
Retained earnings |
|
2,304 |
|
|
|
2,017 |
|
|
Total shareholders’ equity |
|
3,185 |
|
|
|
3,769 |
|
|
Total liabilities and shareholders’ equity |
$ |
6,275 |
|
|
$ |
5,741 |
|
|
|
|
|
|
|
Whole Foods Market, Inc. |
|
|
|
Consolidated Statements of Cash Flows
(unaudited) |
|
|
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40 weeks ended |
|
|
|
|
July 3, 2016 |
|
July 5, 2015 |
Cash flows from operating
activities |
|
|
|
Net income |
$ |
419 |
|
|
$ |
479 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
376 |
|
|
|
331 |
|
|
Share-based payment expense |
|
39 |
|
|
|
51 |
|
|
LIFO expense |
|
1 |
|
|
|
3 |
|
|
Deferred income tax expense |
|
16 |
|
|
|
47 |
|
|
Excess tax benefit related to exercise of team member stock
options |
|
(4 |
) |
|
|
(10 |
) |
|
Accretion of premium/discount on marketable securities |
|
1 |
|
|
|
14 |
|
|
Deferred lease liabilities |
|
31 |
|
|
|
24 |
|
|
Other |
|
7 |
|
|
|
10 |
|
|
Net change in current assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(100 |
) |
|
|
(19 |
) |
|
|
Merchandise inventories |
|
(25 |
) |
|
|
(47 |
) |
|
|
Prepaid expenses and other current assets |
|
(39 |
) |
|
|
(4 |
) |
|
|
Accounts payable |
|
(2 |
) |
|
|
16 |
|
|
|
Accrued payroll, bonus and other benefits due team members |
|
(27 |
) |
|
|
26 |
|
|
|
Other current liabilities |
|
57 |
|
|
|
72 |
|
|
Net change in other long-term liabilities |
|
14 |
|
|
|
4 |
|
|
Net cash provided by operating activities |
|
764 |
|
|
|
997 |
|
Cash flows from investing
activities |
|
|
|
Development costs of new locations |
|
(295 |
) |
|
|
(411 |
) |
Other property and equipment expenditures |
|
(226 |
) |
|
|
(268 |
) |
Purchases of available-for-sale securities |
|
(311 |
) |
|
|
(458 |
) |
Sales and maturities of available-for-sale securities |
|
375 |
|
|
|
497 |
|
Decrease (increase) in restricted cash |
|
3 |
|
|
|
(19 |
) |
Payment for purchase of acquired entities, net of cash
acquired |
|
(11 |
) |
|
|
(4 |
) |
Other investing activities |
|
(12 |
) |
|
|
(8 |
) |
|
Net cash used in investing activities |
|
(477 |
) |
|
|
(671 |
) |
Cash flows from financing
activities |
|
|
|
Purchases of treasury stock |
|
(929 |
) |
|
|
(188 |
) |
Common stock dividends paid |
|
(133 |
) |
|
|
(137 |
) |
Issuance of common stock |
|
17 |
|
|
|
61 |
|
Excess tax benefit related to exercise of team member stock
options |
|
4 |
|
|
|
10 |
|
Proceeds from long-term borrowings |
|
999 |
|
|
|
- |
|
Proceeds from revolving line of credit |
|
300 |
|
|
|
- |
|
Payments on long-term debt and capital lease obligations |
|
(306 |
) |
|
|
- |
|
Other
financing activities |
|
(9 |
) |
|
|
(1 |
) |
|
Net cash used in financing activities |
|
(57 |
) |
|
|
(255 |
) |
Effect of exchange rate changes on cash and cash
equivalents |
|
5 |
|
|
|
(4 |
) |
Net change in cash and cash equivalents |
|
235 |
|
|
|
67 |
|
Cash and cash equivalents at beginning of period |
|
237 |
|
|
|
190 |
|
Cash and cash equivalents at end of period |
$ |
472 |
|
|
$ |
257 |
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
Federal and state income taxes paid |
$ |
357 |
|
|
$ |
263 |
|
|
Interest paid |
$ |
27 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
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. Further, Adjusted EBITDA is
used in connection with covenant compliance associated with the
Company’s Senior Notes and Credit Agreement. |
|
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. |
|
|
|
|
|
|
|
|
|
|
|
12 weeks ended |
|
40 weeks ended |
EBITDA and Adjusted EBITDA |
July 3, 2016 |
|
July 5, 2015 |
|
July 3, 2016 |
|
July 5, 2015 |
Net income |
$ |
120 |
|
|
$ |
154 |
|
|
$ |
419 |
|
|
$ |
479 |
|
Provision
for income taxes |
|
76 |
|
|
|
98 |
|
|
|
261 |
|
|
|
306 |
|
Interest
expense |
|
12 |
|
|
|
- |
|
|
|
30 |
|
|
|
- |
|
Investment and other expense (income) |
|
1 |
|
|
|
(5 |
) |
|
|
(8 |
) |
|
|
(12 |
) |
|
Operating income |
|
209 |
|
|
|
247 |
|
|
|
702 |
|
|
|
773 |
|
Depreciation and amortization |
|
117 |
|
|
|
106 |
|
|
|
376 |
|
|
|
331 |
|
|
EBITDA |
|
326 |
|
|
|
353 |
|
|
|
1,078 |
|
|
|
1,104 |
|
Share-based
payment expense |
|
11 |
|
|
|
14 |
|
|
|
39 |
|
|
|
51 |
|
Deferred rent |
|
12 |
|
|
|
8 |
|
|
|
36 |
|
|
|
27 |
|
|
Adjusted
EBITDA |
$ |
349 |
|
|
$ |
375 |
|
|
$ |
1,153 |
|
|
$ |
1,182 |
|
|
|
|
|
|
|
|
|
|
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. |
|
|
|
|
|
|
|
12 weeks ended |
|
40 weeks ended |
Free Cash Flow |
July 3, 2016 |
|
July 5, 2015 |
|
July 3, 2016 |
|
July 5, 2015 |
Net cash provided by operating activities |
$ |
189 |
|
|
$ |
287 |
|
|
$ |
764 |
|
|
$ |
997 |
|
Development costs of new locations |
|
(98 |
) |
|
|
(116 |
) |
|
|
(295 |
) |
|
|
(411 |
) |
Other property and equipment expenditures |
|
(85 |
) |
|
|
(104 |
) |
|
|
(226 |
) |
|
|
(268 |
) |
|
Free Cash
Flow |
$ |
6 |
|
|
$ |
67 |
|
|
$ |
243 |
|
|
$ |
318 |
|
|
|
|
|
|
|
|
|
|
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 |
July 3, 2016 |
|
July 5, 2015 |
Net income |
$ |
475 |
|
|
$ |
607 |
|
Interest
expense, net of tax |
|
18 |
|
|
|
- |
|
|
ROIC earnings |
|
493 |
|
|
|
607 |
|
Total rent expense, net of tax1 |
|
279 |
|
|
|
258 |
|
Estimated depreciation on capitalized operating leases,
net of tax2 |
|
(186 |
) |
|
|
(172 |
) |
|
ROIC
earnings, including the effect of capitalized operating leases |
$ |
586 |
|
|
$ |
693 |
|
|
|
|
|
|
Average
working capital, excluding current portion of long-term debt |
$ |
598 |
|
|
$ |
525 |
|
Average
property and equipment, net |
|
3,240 |
|
|
|
2,999 |
|
Average
other assets |
|
1,016 |
|
|
|
1,090 |
|
Average other liabilities |
|
(682 |
) |
|
|
(620 |
) |
|
Average invested capital |
|
4,172 |
|
|
|
3,994 |
|
Average estimated asset base of capitalized operating
leases3 |
|
3,632 |
|
|
|
3,378 |
|
|
Average
invested capital, including the effect of capitalized operating
leases |
$ |
7,804 |
|
|
$ |
7,372 |
|
|
|
|
|
|
ROIC |
|
11.8 |
% |
|
|
15.2 |
% |
ROIC, including the effect of capitalized of operating
leases |
|
7.5 |
% |
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted ROIC |
|
|
|
Net income |
$ |
475 |
|
|
$ |
607 |
|
Interest
expense, net of tax |
|
18 |
|
|
|
- |
|
Adjustments, net of tax4 |
|
48 |
|
|
|
1 |
|
|
Adjusted
ROIC earnings |
|
541 |
|
|
|
608 |
|
Total rent expense, net of tax1 |
|
279 |
|
|
|
258 |
|
Estimated depreciation on capitalized operating leases,
net of tax2 |
|
(186 |
) |
|
|
(172 |
) |
|
Adjusted ROIC earnings, including the effect of capitalized
operating leases |
$ |
634 |
|
|
$ |
694 |
|
|
|
|
|
|
Average
working capital, excluding current portion of long-term debt |
$ |
598 |
|
|
$ |
525 |
|
Average
property and equipment, net |
|
3,240 |
|
|
|
2,999 |
|
Average
other assets |
|
1,016 |
|
|
|
1,090 |
|
Average other liabilities |
|
(682 |
) |
|
|
(620 |
) |
|
Average invested capital |
|
4,172 |
|
|
|
3,994 |
|
Average estimated asset base of capitalized operating
leases3 |
|
3,632 |
|
|
|
3,378 |
|
|
Average
invested capital, including the effect of capitalized operating
leases |
$ |
7,804 |
|
|
$ |
7,372 |
|
|
|
|
|
|
Adjusted ROIC |
|
13.0 |
% |
|
|
15.2 |
% |
Adjusted ROIC, including the effect of capitalized
operating leases |
|
8.1 |
% |
|
|
9.4 |
% |
|
|
|
|
|
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
Whole Foods Market, Inc. (NASDAQ:WFM)
Historical Stock Chart
From Aug 2024 to Sep 2024
Whole Foods Market, Inc. (NASDAQ:WFM)
Historical Stock Chart
From Sep 2023 to Sep 2024