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Whole Foods Reports 13% Sales Increase

Whole Foods Market, Inc. has reported results for the 12-week second quarter ended April 11, 2010. Sales increased 13% to $2.1 billion. Comparable store sales increased 8.7%, or 3.9% on a two-year stacked basis. Identical store sales, excluding four relocations, increased 7.7%, or 1.9% on a two-year stacked basis. Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased 40% to $182.3 million. Income available to common shareholders increased 147% to $67.5 million, and diluted earnings per share increased 102% to $0.39 per diluted share. Results included a $3.2 million, or $0.01 per diluted share, gain on the sale of a non-operating property in the current year, and asset impairment charges of $13.1 million, or $0.05 per diluted share, in the prior year.

"Our second quarter results are the best we have reported in several years, with extremely strong growth in comparable store sales, earnings and cash flow," said John Mackey, chief executive officer and co-founder of Whole Foods Market. "We have successfully emerged from this recession with a healthier balance sheet and better capital disciplines. Our new stores are performing very well, and we look forward to rebuilding our store development pipeline and re-accelerating our square footage growth in the future."

During the quarter, the Company produced $181.5 million in cash flow from operations and invested $64.5 million in capital expenditures, of which $51.7 million related to new stores. This resulted in free cash flow of $117.0 million. Total cash and cash equivalents, restricted cash, and investments were $725.8 million, and total debt was $729.0 million. Subsequent to the close of the second quarter, the Company repaid the $210 million unswapped portion of its $700 million term loan maturing in August 2012, leaving $490 million outstanding. In addition, the Company has $337.7 million available on its credit line, net of $12.3 million in outstanding letters of credit.

For the 28-week period ended April 11, 2010, sales increased 10% to $4.7 billion. Comparable store sales increased 5.7%, or 1.4% on a two-year stacked basis, and identical store sales (excluding five relocations and two major expansions) increased 4.7%, or -0.6% on a two-year stacked basis. EBITDA increased 32% to $368.3 million, income available to common shareholders increased 113% to $117.1 million, and diluted earnings per share increased 83% to $0.72. Year-to-date results included a gain of $3.2 million from the sale of a non-operating property, asset impairment charges of $1.9 million versus $15.4 million in the prior year, and FTC-related legal costs of $1.5 million versus $13.9 million in the prior year.

Year to date, the Company has produced $343.0 million in cash flow from operations and invested $147.0 million in capital expenditures, resulting in free cash flow of $196.0 million.

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