Whole Foods Extends Sales Slide -- WSJ
July 27 2017 - 3:02AM
Dow Jones News
Streak now stands at two years after 1.9% same-stores decline;
CEO notes late burst
By Heather Haddon
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (July 27, 2017).
Whole Foods Market Inc. said Wednesday that comparable sales
fell again in the latest quarter, extending a streak going back two
years as the natural grocer faced up to tougher competition.
Same-store sales fell by 1.9% during its fiscal third quarter
ended July 2, compared with a year ago. Whole Foods plans to sell
itself to Amazon.com, and has promised to reverse the sales losses
by the end of its current fiscal year in September.
John Mackey, the company's chief executive and co-founder, said
same-store sales turned positive in the last three weeks of
July.
"Our comparable store sales improved," Mr. Mackey said.
The company's stock was flat in intra-day trading at $41.82, a
slight dip from the $42 a share Amazon offered to acquire the
company last month for a total of $13.7 billion, including debt.
The merger would be the third-largest retail tie-up in the U.S.
since 1995, according to Dealogic.
Whole Foods reported several hours ahead of schedule after a
J.P. Morgan Securities LLC analyst released some of the company's
earnings numbers in a research note.
A Whole Foods spokeswoman said an earnings table was
inadvertently posted on the company's website while testing its
"functionality." It was removed minutes later. The company decided
to release its results two hours later.
The company skipped an investor call on Wednesday because of the
pending deal.
Net profit fell to $106 million in the quarter from $120 million
a year earlier. Per share earnings dipped to 33 cents from 37
cents. Earnings-per-share and same-store sales beat forecasts.
Earlier this year, Whole Foods faced demands from activist
investors to explore a sale and replace its board among other
issues. Mr. Mackey forged the deal with Amazon in part because they
saw that partnership as more favorable than contending with the
activist demands, according to a corporate filing.
Investors are expected to vote on the deal on Aug. 23. Hedge
fund Jana Partners LLC fund sold its nearly 9% stake in Whole Foods
last week for a profit of roughly $300 million. Mutual-fund manager
Neuberger Berman still owns a roughly 2.7% stake, making it Whole
Foods's sixth-largest investor, according to FactSet.
Roughly a dozen members of Congress have called for a close
review of the Whole Foods-Amazon deal. The Consumer Watchdog group
is lobbying the Federal Trade Commission to block it on allegations
that Amazon's pricing discounts are misleading.
An Amazon spokesman said those assertions "are flat out
wrong."
--Laura Stevens contributed to this article.
Write to Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
July 27, 2017 02:47 ET (06:47 GMT)
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