Whole Foods Market reported a 46% jump in earnings and a 2.3% increase in sales for the fourth quarter, figures that led the company to report its sales have stabilized and turned the corner.
The Austin, Texas-based company announced its financial results for the fourth quarter and the fiscal year ending Sept. 27 on Nov. 4. Its sales were earnings before interest, taxes, depreciation and amortization were $133.4 million, and its sales were $1.8 billion.
Sales for the year were $8 billion, 540,000 less than analyst projections, according to Thomson Reuters. Excluding 12 relocations and three major expansions, comparable store sales decreased 3.1% over the year, with identical store sales decreasing 4.3%. Last year, comparable store sales increased 4.9% and identical store sales increased 3.6%.
Despite its optimism, after the companyâs announcement, its stock price took a 9% hit, according to the Wall Street Journal. By Nov. 5, it was down 15%.
Whole Foods reported a decrease of 0.9% in comparable sales, compared to a 0.4% increase in the prior year, and a decrease of 2.3% in identical stores sales, compared to a 0.5% decrease in the prior year, for the fourth quarter, according to its earnings statement. Identical store sales can be a key barometer of grocer health, according to Wall Street Journalâs Market Watch.
âOur comparable store and identical store sales trends improved for the second quarter in a row and, after five quarters of year-over-year declines, so far in the first quarter are up 1.6% and 0.4%, respectively,â said John Mackey, chief executive officer, in a financial news release.
Although the company feels it has turned a corner in an economy that hasnât been friendly to high-end retailing, it has still slowed down opening of new stores.
Three new stores were opened during the fourth quarter, and three more have been opened since, according to the release. San Francisco, Santa Barbara, Calif., and Seattle have new Whole Foods stores since Sept. 27, while one former Wild Oats in Littleton, Colo., closed. These figures bring the company to 286 stores total, with 10.6 million square feet between them.
Although it has a strong start into its fiscal year 2010, Whole Foods predicts increased price investments could negatively impact sales going forward. With no anticipated positive change in the economy in the short term, the company expects sales results in line with or slightly better than quarter-to-date results, which include a 1.6 increase in comparable sales and a 0.4% increase in identical sales.