Whole Foods Market Inc., reported a 31% jump in quarterly earnings as sales accelerated and plans to open more stores in the next year amid expanding consumption of organic and “natural” products.
The Austin, Tex.-based company has opened five stores so far in fiscal 2012, which began in late-September, and recently signed leases for new locations in cities including Phoenix, Tulsa, Okla., and London, according to a Nov. 2 statement reporting financial results.
The company still plans to add 1,000 stores in the U.S., the company said, repeating a statement made earlier this year. Consumer demand for natural and organic products “continues to increase, and the company’s flexibility on new store size opens up additional market opportunities,” according to the statement.
“Canada and the United Kingdom hold great promise as well,” according to the statement.
Whole Foods’ long-term target would be more than triple the 316 locations the company currently operates in the U.S., Canada and UK. The company expects to open about 78 additional stores through fiscal 2015, according to the Nov. 2 statement. It didn’t specify when it may reach its long-term goal.
Whole Foods outperformed larger U.S. supermarket chains in recent years by drawing higher-income customers willing to pay a premium for organic fruits and vegetables and other items. Traditional grocery chains struggled to emerge from the 2008-09 recession as high unemployment and expensive gasoline squeezed many middle- to lower-income customers.
During the three months ended Sept. 25, Whole Foods’ comparable-store sales rose 8.7% compared with the same period a year earlier, up from 8.4% year-over-year growth in the previous quarter, according to the company.
Among large chains, Kroger Inc.’s identical-store sales rose 5.3% excluding fuel in its most-recent quarter, while sales at Safeway, Inc., rose 1.5%. Identical or comparable-store sales are a closely-followed gauge of retailer performance and typically reflect locations open at least one year.
For Whole Foods’ fiscal 2012, comparable-store sales are projected to rise 6.8% to 8.8%, unchanged from a previous forecast. Comparable-store sales increased 8.5% for all of 2011, compared with an average of 5.4% for the previous five years.
“The lessons we learned during the recession will drive even higher levels of operating performance and returns on invested capital over time,” John Mackey, Whole Foods’ co-founder and co-chief executive, said in the statement.
During the quarter, Whole Foods posted net income of $75.5 million, up from $57.5 million during the same period a year earlier, the company said. Sales rose 12%, to $2.35 billion.
Whole Foods held its per-share earnings forecast for 2012 unchanged at $2.21 to $2.26, compared with a profit of $1.93 in 2011.