You are here
AUSTIN, Texas -- For Whole Foods Market, Inc. here, sales growth continues to seem natural. The chain said yesterday that sales for its 12-week third quarter jumped 23 percent to $1.1 billion, thanks to year-over-year square footage growth and comparable store sales growth of 15.2 percent.
Sales in identical stores (excluding four relocated stores and two major store expansions) increased an impressive 13.2 percent for the quarter, which ended July 3.
Net income was up 31 percent to $41.7 million.
The natural and organic foods retailer also said that for the 40-week period ended July 3, sales increased 22 percent to $3.6 billion, with sales in comparable stores increasing 12.6 percent and sales in identical stores increasing 11.3 percent. Net income for that period was up 27 percent to $131.6 million.
"We are producing impressive sales and earnings results even as we compare against one of the best years in our company's history," said John Mackey, c.e.o., chairman, and co-founder, in a statement. He noted that Whole Foods' new stores continue to perform above the company's expectations, and produced a record $618,000 in average weekly sales during the quarter.
"We are working hard to capitalize on the tremendous growth opportunities that lie ahead of us by steadily increasing our store development pipeline, which at 3.5 million square feet currently represents 64 percent of our existing square footage. We believe our goal of $10 billion in sales by the year 2010 is well within our reach," Mackey said.
At least one analyst has taken a more cautious approach in estimating the retailer's possibilities, however, at least in the short term. Robert Summers of Bear Stearns initiated coverage of Whole Foods Markets last week with an "underperform" rating.
In a research note published on July 22, Summers acknowledged that Whole Foods has been witnessing a robust increase in its comps over the past couple of years. However, he said he believes that the chain would be unable to sustain such high comp trends, and that its comps would decelerate in the forthcoming quarters. "There is significant downward risk to Whole Foods Markets' share price if the company does not meet the market's high expectations in the near term," Summers said in the note.
In the third quarter, Whole Foods opened three new stores, in Toronto, Canada; Middletown, N.J.; and Metairie, La. (a relocation), ending the period with 170 stores totaling approximately 5.5 million square feet.
The company said it expects to open five stores during the fourth quarter, ending the fiscal year with 175 stores and approximately 5.8 million square feet in operation.
Whole Foods also disclosed the recent signing of 10 new store leases representing a total of approximately 616,000 square feet, in Cupertino, Calif. (63,000 sq. ft.); Hollywood, Calif. (61,000 sq. ft.); San Jose, Calif. (45,000 sq. ft.); Pembroke Pines, Fla. (55,000 sq. ft.); Schaumberg, Ill. (67,000 sq. ft.); Minneapolis, Minn. (73,000 sq. ft.); Paramus, N.J. (77,000 sq. ft.); South Hills, Pa. (68,000 sq. ft.); Dallas (51,000 sq. ft.); and Madison, Wisc. (55,000 sq. ft.).
Whole Foods Market currently has 171 stores in the United States, Canada and the United Kingdom.