Whole Foods Profit Falls; Sales Slip
July 27 2016 - 6:27PM
Dow Jones News
By Maria Armental
Whole Foods Market Inc. on Wednesday gave weak projections for
the current quarter as it booked its fourth-consecutive decline in
quarterly profit.
Shares, up 0.4% this year, fell 4.6% to $32.10 in after-hours
trading.
In the latest period, Whole Foods reported a 2.6% decline in
comparable sales, against analysts' projected 2.3% decline,
according to FactSet. So far this quarter, it said, comparable
sales were down 2.4%. The Austin, Texas, company has projected it
will post its first annual decline in comparable sales since
2009.
The company defines comparable sales, a key industry metric, as
sales at stores it has owned for at least 57 weeks, up from 53
weeks previously.
The high-end grocer, whose name became synonymous with natural
and organic foods, has been beset by a sales slowdown as
competitors expanded into what had been a niche market. In
addition, it has faced a series of setbacks and bad publicity,
including a price scandal last year in New York that led to a
$500,000 fine and a recent warning from U.S. health regulators over
food safety at a Massachusetts plant that makes prepared foods and
other products for more than 70 stores in eight states along the
East Coast, from New Jersey to Maine.
Over all for the 12 weeks ended July 3, Whole Foods reported a
profit of $120 million, or 37 cents a share, compared with $154
million, or 43 cents a share, a year earlier. The most-recent
quarter's results were based on 11% fewer shares outstanding.
Revenue rose 2% to $3.70 billion.
Analysts surveyed by Thomson Reuters had projected 37 cents a
share on $3.73 billion in revenue.
Gross profit margin narrowed to 34.7% from 35.6% a year
earlier.
In the current quarter, Whole Foods expects to make 23 cents to
24 cents in adjusted profit with sales increasing 2% from the
year-earlier period. Analysts surveyed by Thomson Reuters project
25 cents a share in adjusted profit on $3.56 billion in sales, a
3.6% increase from the year-earlier period.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
July 27, 2016 18:12 ET (22:12 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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