Walter Robb will exit from his role as co-CEO of Whole Foods Market at the end of the year, with fellow co-CEO John Mackey becoming the sole chief executive, the retailer announced today. Robb will remain on the company’s board of directors, and serve as an adviser and continue in his role as chairman for Whole Kids Foundation and Whole Cities Foundation.
The move was announced as Whole Foods reported its fourth-quarter and fiscal year 2016 earnings to investors and analysts. In the fourth quarter, sales increased 2 percent to $3.5 billion, while comparable store sales decreased 2.6 percent. Diluted earnings per share were 28 cents.
Referencing the retailer’s struggle with comps over the past few quarters as it faces intense competition from various channels, the leadership team said comps are starting to stabilize, and it’s seeing “an improvement in trends quarter to date for both traffic and basket size.” For the year ending Sept. 25, 2016, total sales increased 2.2 percent, while comparable store sales decreased 2.5 percent.
The elimination of the co-CEO structure is indicative of a broader move by Whole Foods toward a more streamlined structure. As part of its efforts to reduce its expenses by a $300 million run rate by the end of fiscal year 2017, Whole Foods has reduced buying positions, transformed its purchasing operations and combined teams in lower-volume stores. It’s more than halfway to that reduction goal, Mackey said.
Priorities for fiscal year 2017 include rolling out its rewards program to all U.S. stores, refining assortment and category management, and continuing to evolve its purchasing structure to a hybrid model that leverages global and regional teams. Whole Foods is projecting sales growth of 2.5 percent to 4.5 percent and comparable store sales growth of negative 2 percent to 0 percent. In a statement accompanying its financial results, the company said it expected to incur a charge of about $13 million associated with Robb’s separation agreement.
In addition to Robb’s departure, Whole Foods announced that Chief Financial Officer Glenda Flanagan, who has been with the company for 29 years, will also retire at the end of fiscal year 2017, with the search for a new CFO beginning early next year.
MaryEllen Coe, VP of sales and product operations for Google, has also joined the board of directors.