Merger-Related Costs Depress Wild Oats’ Earnings

Wild Oats Markets said costs related to its pending sale to Whole Foods Market resulted in a large earnings decline for the second quarter and first half that ended June 30, though sales were strong.

BOULDER, Colo. — Wild Oats Markets here said costs related to its pending sale to Whole Foods Market resulted in a large earnings decline for the second quarter and first half that ended June 30, though sales were strong. The company agreed in February to be acquired by Austin, Texas-based Whole Foods, but the Federal Trade Commission filed suit to block the transaction on antitrust grounds; a decision by a federal court judge is pending. Net income for the quarter fell 97.4% to $127,000 — reflecting restructuring and asset impairment charges of $372,000, the company indicated — while sales jumped 5.1% to $311.8 million, and comparable-store sales increased 3.1%. For the half, net income dropped 77.4% to $1.8 million, reflecting charges of $1.8 million, while sales climbed 4.5% to $621.7 million and comps rose 1.7%. In a filing with the Securities and Exchange Commission, the company the financial results “illustrate the underlying strength in the business and demonstrate the success of several merchandising and marketing initiatives put into place early this year to drive top-line growth, [which] are netting positive results, and we expect to continue to build sales and profitability improvements.”

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