WILD OATS' COMPS BOOSTED BY STRIKE

BOULDER, Colo. -- Wild Oats Markets here reported comparable-store sales gains of 8.5% during its fiscal first quarter ended March 27, sparked in part by effects of the labor dispute in Southern California. Excluding the five Wild Oats and 17 Henry's Marketplace stores affected by the strike, comps were up by 3.6%, the company said.Wild Oats reported earnings of $2.4 million on sales of $264 million.

BOULDER, Colo. -- Wild Oats Markets here reported comparable-store sales gains of 8.5% during its fiscal first quarter ended March 27, sparked in part by effects of the labor dispute in Southern California. Excluding the five Wild Oats and 17 Henry's Marketplace stores affected by the strike, comps were up by 3.6%, the company said.

Wild Oats reported earnings of $2.4 million on sales of $264 million. Earnings were up 63.7%, and sales climbed by 11.4% from the same period a year ago. Company officials attributed the sales increase to aftereffects of the Southern California strike-lockout and to six new stores.

"We are pleased with the rate of retention we have experienced in our 22 Southern California stores," Wild Oats' Chief Financial Officer Edward Dunlap said in a conference call. "We believe it is still too soon to determine what the long-term trend will be because the conventional stores have been very aggressive with promotions to lure customers back. However, the level of customer traffic and sales these stores have retained in the last two months has exceeded our own internal expectations, and has exceeded historical retention rates for stores affected by labor strikes in the past."

Wild Oats made advances on initiatives in its supply chain, but those affected gross margins during the quarter, said Perry D. Odak, president and CEO.

All Wild Oats stores are now supplied by United Natural Foods, Dayville, Conn., Odak said, and the transition to UNF from Tree of Life will be completed next month. Odak said the balancing of two distributors during the transition period contributed to difficulties in maintaining acceptable in-stock levels, particularly among private-label products.

Elsewhere, Odak said Wild Oats stores in five Western states experienced "variability" in supply and service as the company opened a new perishable distribution center. The Riverside, Calif., facility, which replaces two smaller distribution centers, should be fully operational by the end of the second quarter. "Once in full operation, it will offer improved quality and lower costs for our stores," Odak said.

1ST-QUARTER RESULTS

Qtr Ended: 3/27/04; 3/29/03

Sales: $264 million; $236 million

Change: +11.4%

Comp-store: +8.5%

Net Income: $2.4 million; $1.4 million

Change: +63.7%

Inc/Share: 8 cents; 5 cents