BOULDER, Colo. -- Wild Oats Markets here said last week its restructuring effort is off to a slower start than the company had initially anticipated.
Delays in store remodelings and dispositions contributed to a 2% decline in comparable-store sales at Wild Oats during its fiscal second quarter ended July 1, company officials said.
The remodelings and store dispositions -- part of a restructuring plan announced in May that is designed to attract more "crossover" shoppers -- are expected to narrow comp-store declines, which were also down 2% in the first quarter.
However, Mary Beth Lewis, Wild Oats chief financial officer, said during a conference call that she expects comp sales to continue to lose about 2% per quarter for the remainder of the year.
Lewis said "permitting and landlord issues" have delayed some remodeling projects. The company has completed 10 remodels of a planned 33 so far this year, with 12 under way, she added. Wild Oats' strategy also calls for the closure or sale of some stores, and for the company to reduce the number of banners it currently operates under.
Wild Oats sold two stores and closed two others during the quarter, Lewis said. The company is evaluating the closure or sale of four additional stores.
Lewis also said that cannibalization -- the result of new stores in San Diego and Portland, and heavy competition in other markets -- affected same-store sales.
"Comps were at the lower end of our expectations," Lewis said. "Sales have been great at the new stores in San Diego and Portland, but there is some cannibalization there."
Sales for the second quarter were $212.8 million, an increase of 23%. Wild Oats attributed the increase to the opening or relocation of eight stores and the acquisition of two additional stores during the first half of 2000. The company reported a net loss of $8.8 million. Excluding a $13.4 million after-tax restructuring charge, net income was $4.6 million.
