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BOULDER, Colo. - National natural and organic foods retailer Wild Oats Markets Inc. on Thursday reported net income of $1.5 million, or $0.06 per share, on sales of $236.2 million in its second quarter ended June 29.
Net sales were up 3.0 percent compared with $229.4 million in the second quarter of 2001. The sales gain was driven by 5.2 percent comparable store sales growth in the second quarter, compared with 3.9 percent in last year's second quarter, the company said. Same-store sales in the second quarter continued the positive momentum begun in the first quarter of 2001, but were not as robust in sequential quarters due to stronger year-over-year comparisons in the second quarter, and the shift of the Easter holiday weekend to the first quarter in 2002 from the second quarter in 2001.
This was the sixth consecutive quarter of positive same-store sales, which reversed what was a negative trend in 2000. In 2001, comparable store sales were 1.0 percent in the first quarter, 3.9 percent in the second quarter, 5.5 percent in the third quarter and 5.7 percent in the fourth quarter, and were 7.3 percent in the first quarter of 2002.
Improved same-store sales, a 6.1 percent increase in customer traffic, and a 3.3 percent rise in average sales per customer for the first half of 2002 were primarily driven by continued positive customer response to the marketing and merchandising programs, the company said. These initiatives have been expanded to additional Wild Oats stores in Arizona, Arkansas, Illinois, New Mexico, Ohio, Tennessee and Utah.
"Despite a challenging economy and business environment for many industries, we believe our financial performance in the second quarter and first half of 2002 is evidence that our company-wide initiatives are working," said Perry D. Odak, president and CEO. "We expect our turnaround plan to continue to drive bottom line momentum as we are able to leverage our sales increases into profitable growth. We continue to focus on operational efficiencies in our stores, which has allowed us to improve service to our customers, further reduce inventory levels, and generate cash to pay down debt and fund our growth initiatives."
In June, the company announced that it had signed a distribution contract, commencing September 1, 2002, with Tree of Life, Inc. as its primary national distribution partner for organic, natural and specialty food products. Since the announcement, a multi-disciplined Wild Oats/Tree of Life project team has been working on a smooth, phased transition to minimize disruption to the company's business. Wild Oats expects all systems will be in place to transition to Tree of Life as its new distributor in September 2002.
Wild Oats currently operates 101 natural foods stores in 23 states and British Columbia, Canada. The company's markets include: Wild Oats Natural Marketplace, Henry's Marketplace, Nature's - a Wild Oats Market, Sun Harvest and Capers Community Markets.