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Whole Foods Market sees record $3.7 billion sales in third quarter

Whole Foods Market's flagship store in Austin, Texas
Whole Foods Market reported on Wednesday that total sales increased 0.6 percent in the quarter, but same-store sales decreased 1.9 percent compared to last year.

Whole Foods Market Inc. on Wednesday reported a record $3.7 billion in sales in the third quarter, which ended July 2. Total sales increased 0.6 percent, while same-store sales decreased 1.9 percent compared to the same time last year.

The company released a statement with the results and did not hold an earnings call for the third quarter because of the company’s merger agreement with Amazon.

“Our comparable store sales improved sequentially on a one- and two-year basis in the third quarter, and that momentum has accelerated 220 basis points in the fourth quarter, resulting in positive overall comps for the first three weeks.” said John Mackey, co-founder and chief executive officer of Whole Foods Market.

Net income was $106 million, or 2.8 percent of sales; diluted earnings per share were $0.33; and earnings before interest, taxes, depreciation and amortization (EBITDA) were $293 million, or 7.9 percent of sales.

Whole Foods produced operating cash flow of $277 million, free cash flow of $145 million, and returned $44 million in dividends to shareholders, ending the quarter with $1.5 billion of total available capital and $1.0 billion in total debt. Results included charges of $14 million, or $0.03 per diluted share, related to advisory fees.

Excluding these charges, diluted earnings per share were $0.36.

“For the quarter, we delivered record sales and free cash flow, and returned $44 million in dividends to our shareholders,” Mackey said in the statement.

Whole Foods opened five stores and relocated one during the third quarter, according to the released statement. Already during the fourth quarter, the company has opened two Whole Foods Markets and two Whole Foods Market 365 stores, including one relocation.

Merger with Amazon expected to close this year and Whole Foods Market, Inc. announced on June 16 a definitive merger agreement under which will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, including Whole Foods Market’s net debt.

Completion of the transaction is subject to approval by Whole Foods Market's shareholders, regulatory approvals and other customary closing conditions. However, the parties expect to close the transaction during the second half of 2017.

Because of the pending merger, Whole Foods did not update its outlook for the fiscal year or later targets, and is not discussing its financial results.

Total sales increase 1.3 percent year-to-date

For the 40-week period ended July 2, total sales increased 1.3 percent to $12.4 billion, and comparable store sales decreased 2.4 percent. Net income was $300 million, or 2.4 percent of sales; diluted earnings per share were $0.94; EBITDA was $941 million, or 7.6 percent of sales; and return on invested capital was 10 percent.

Whole Foods produced operating cash flow of $901 million, free cash flow of $393 million, and returned $132 million in capital to shareholders through dividends and share repurchases.

In fiscal year 2016, the company had sales of approximately $16 billion. Whole Foods has more than 465 stores in the United States, Canada, and the United Kingdom.


Source: Whole Foods Market

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