Whole Foods' ID Sales Decline, Gets New Investment

Whole Foods Market said Wednesday that identical-store sales were down slightly in the fourth quarter and have continued a downward spiral in the first weeks of its new fiscal year, as economic pressures continued to batter the once high-flying natural foods retailer.

AUSTIN, Texas — Whole Foods Market here said Wednesday that identical-store sales were down slightly in the fourth quarter and have continued a downward spiral in the first weeks of its new fiscal year, as economic pressures continued to batter the once high-flying natural foods retailer. In a separate announcement Wednesday, Whole Foods said it had raised $425 million through sale of preferred stock to an affiliate of Leonard Green & Partners. That deal — which would comprise 17% of the company assuming conversion to common stock — was a “strong vote of confidence in our business model and our long-term growth prospects,” according to a statement from John Mackey, chairman and chief executive officer of Whole Foods. When combined with cash from operations, the investment makes Whole Foods’ development pipeline of 66 stores “very manageable,” Mackey added. For the 12-week quarter that ended Sept. 28, net income of $1.5 million — or 1 cent per share — was down sharply from $33.9 million in the 13-week fourth quarter a year ago. Analysts had expected Whole Foods would post earnings of 13 cents, reports said. Overall sales of $1.8 billion increased 13% when adjusted for the extra week. Identical-store sales decreased 0.5% vs. a 6% increase a year ago. The company in a press release declined to give comparable sales guidance for fiscal 2009, citing economic conditions, but said identical-store sales had decreased by 3.3% in the first five weeks of the fiscal year vs. gains of 6.7% in the same period last year.

Read More of Today's Headlines [2]