BOULDER, Colo. -- Wild Oats Markets here said that its new Fresh Look marketing and merchandising program led to strong comp-store gains for the fourth quarter ended Dec. 29, and said its cost-cutting efforts should have the company operating in the black by the second half of 2002.
Perry Odak, president and chief executive officer, said in a conference call last week, "Our new Fresh Look merchandising and marketing program is achieving desired results through more frequent advertising and strategic pricing and merchandising efforts.
"Early results demonstrate that the longer the Fresh Look program is in a market, the more positive the customer reach and financial performance of the participating stores. As a result, we will continue to introduce this program in our remaining Wild Oats stores in 2002."
The company said stores that had been on the Fresh Look program for 30 weeks or more at the end of 2001 have experienced improved comparable-store sales of 4.7%, and customer traffic in these stores increased by 8.9% on average.
Sales for the quarter were $222 million, up 7.4%, while comp-store sales increased 5.7%. For the year, sales were a record $893 million, an increase of 6.6%.
Despite improved sales, the company saw a net loss in the quarter of $2.8 million, or 14 cents per share, with a loss of $44 million, or $1.80 per share for the year.
Ed Dunlap, chief financial officer, said the losses were primarily due to increased expenses. Selling, general and administrative expenses increased 46% to $10.5 million in the quarter, while SG&A expenses totaled $46 million for the year, a 56.2% increase.
Going forward, Dunlap said continued merchandising efforts should keep same-store sales growth at an above-average level. To achieve operating profitability, Dunlap said that the company has reduced its number of vendors and limited product variety, in addition to applying cost-cutting measures in all areas of operations.
Jonathan Ziegler, San Francisco-based managing director with Deutsche Banc Alex. Brown, New York, said he is cautiously optimistic regarding the company. "I don't think they are out of the woods yet. But they would seem to have the sales momentum and cost-cutting efforts in place to pull it off," he said.
Wild Oats also said it plans to open four stores in 2002, 10 stores in 2003 and expects 20 new units in 2004.
