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BOULDER, Colo. - Wild Oats Markets Inc., a leading national natural and organic foods retailer, announced that financial results for its first quarter ended March 29, 2003 generated net income of $1.4 million, or $0.05 per share, on first quarter sales of $236.0 million.
Net sales for the quarter were $236.0 million, up 1.3 percent compared with $233.0 million in the first quarter of 2002. The company says the sales increase was driven by the addition of four new stores, which more than offset the sale and/or closure of four stores year-over-year.
Comparable store sales in the first quarter of 2003 were negative 0.9 percent compared to positive same-store sales of 7.3 percent in the first quarter of 2002. The company says the decline in comparable store sales is primarily attributable to continued disruption related to the its SKU reduction program commenced in the fourth quarter of 2002 and its transition to a new private label program, which has caused inventory disruptions in private label products as it transitions to new product manufacturers and packaging.
Wild Oats pointed to a number of factors impacting its two percent same store sales decline in the first quarter of 2003, including temporary disruptions to store operations related to unusually severe weather in many parts of the U.S., continued road construction affecting some of its stores, and the shift of the Easter holiday into the second quarter of 2003.
Net income in the first quarter of 2003 more than doubled to $1.4 million, or $0.05 per diluted share, compared with net income of $668,000, or $0.03 per diluted share, in the first quarter of 2002. The increase in net income was due to more than a 100 basis point increase in gross margins and continued control of store-level expenses, which remained constant as a percent of sales in the first quarter of 2003.
"We are pleased with our continued improvement in profitability, which is evidence that our margin enhancement strategies are working," said Perry D. Odak, president and c.e.o. "We expect our sales to show gradual improvement throughout the remainder of the year, as we get beyond most of the disruption related to our SKU reduction and as we roll out our new private label product line in the second half of 2003. However, disruption in some of our stores related to remodeling activity will have an adverse impact on sales through the remainder of the year."
Wild Oats plans to open up to six more stores in the second half of 2003, including Wild Oats Natural Marketplace stores in Lexington, Ky.; Franklin, Tenn.; metropolitan Salt Lake City; Denver; and Colorado Springs, Colo.; as well as one Henry's Marketplace in the greater Los Angeles area. With nearly $920 million in annual sales, the Wild Oats currently operates 101 natural food stores in 25 states and British Columbia, Canada.