Whole Foods Market raised its full-year sales and profit forecast after booking a 32% increase in third-quarter earnings.
The US natural and organic retailer said net income rose to US$116.85m from $88.47m last year in the 12 weeks to 1 July. The company saw sales rise to $2.73bn, up from $2.4bn in the comparable period of last year, while same-store sales grew 8.2%.
Co-chief executive Walter Robb said the company is "thriving" in an economic environment "that is proving to be difficult for many retailers".
Whole Foods raised its earnings and revenue growth outlook for the full financial year. The company now expect earnings of $2.51-2.52 per share, up from previous guidance of $2.44-2.47 per share, on sales growth of 15.6-15.8%, up from 14.8-15.6%. percent.
Whole Foods Market Reports Third Quarter Results
Comparable Store Sales Increase 8.2%, Including Negative 62 Basis Point Impact from Easter Shift; Company Produces Operating Margin of 6.9%, a 27% Increase in Earnings per Share to $0.63,
Raises EPS Outlook for Fiscal Year 2012 by $0.05 to $0.07, and Provides Initial Outlook for Fiscal Year 2013
July 25, 2012. Whole Foods Market, Inc. (NASDAQ: WFM) today reported results for the 12-week third quarter ended July 1, 2012. Sales for the quarter increased 14% to $2.7 billion. Including a negative impact of 62 basis points from Easter shifting from the third quarter last year to the second quarter this year, comparable store sales increased 8.2%, and identical store sales, excluding six relocations and two expansions, increased 8.0%. Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased 26% from the prior year to $260.6 million, net income increased 32% to $116.8 million, and diluted earnings per share increased 27% to $0.63.
"In an economic environment that is proving to be difficult for many retailers, we are thriving and pleased to report another quarter of strong growth and excellent results for our stakeholders," said Walter Robb, co-chief executive officer of Whole Foods Market. "Our accelerated growth plans are on track, and we believe we will continue to gain market share through further differentiating our shopping experience, improving our relative value positioning, and reinforcing our position as America's healthiest grocery store."
Gross profit increased 62 basis points to 36.0% of sales driven primarily by equal improvements in occupancy costs and cost of goods sold as a percentage of sales. The LIFO charge was $1 million this year versus $3.5 million in the prior year, a positive impact of 11 basis points. Direct store expenses improved 57 basis points to 25.3% of sales due primarily to leverage in wages and health care costs as a percentage of sales. As a result, store contribution improved 119 basis points to 10.7% of sales.
For stores in the identical store base, gross profit improved 68 basis points to 36.0% of sales, direct store expenses improved 80 basis points to 25.1% of sales, and store contribution improved 148 basis points to 11.0% of sales.
G&A expenses increased 16 basis points to 3.2% of sales.
During the quarter, the Company produced $211.3 million in cash flow from operations and invested $112.7 million in capital expenditures, of which $74.2 million related to new stores. This resulted in free cash flow of $98.6 million. In addition, the Company paid $25.6 million in dividends to shareholders, repurchased $25.0 million of its common stock, and received $88.2 million in proceeds from the exercise of team member stock options.
The Company ended the quarter with total cash and cash equivalents, restricted cash, and investments of approximately $1.5 billion, a sequential increase of $153.8 million and a year-over-year increase of $792.0 million. Total debt (capital lease obligations) was $19.1 million.
