AUSTIN, Texas — Whole Foods Market said last week sales trends during the first five weeks of the first quarter are running ahead of last year — an indication that fiscal 2010 will be a stronger year than the fiscal year that ended in September.
Total sales for the five-week period are up 5%, with comparable-store sales up 1.6% and identical-store sales up 0.4% — the second consecutive quarter in which comp and ID sales are improving after five quarters of year-over-year declines, the company pointed out.
“We believe our sales have stabilized and officially turned the corner,” John Mackey, chairman and chief executive officer, told analysts during a conference call. “However, with no anticipated positive change in the economy over the short term, and with the likelihood of continued price investments, we believe it is reasonable to expect sales results for the fiscal year [to be] in line with or slightly better than our quarter-to-date results.”
For fiscal 2010, Mackey said Whole Foods expects sales growth of 6% to 8%, comp-store sales of 1% to 4% and ID sales growth somewhere between flat and 3%.
Glenda Chamberlain, executive vice president and chief financial officer, said sales improvements in the first five weeks of the first quarter came primarily from improved traffic counts.
Walter Robb, co-president and co-chief operating officer, said Whole Foods expects to maintain the price-investment programs the company believes are resulting in improved traffic. “Our goal is to stay at the ready to keep up our sales momentum,” he said on the call.
According to Mackey, the chain has switched from a reactive position on pricing to a proactive one.
A.C. Gallo, co-president and co-COO, said the chain shops 300 competitive items per week, “and we are at parity or below on all those items.”
For the fourth quarter that ended Sept. 27, net income rose 2,300% to $36.4 million — given a raft of onetime charges in last year's fourth quarter totaling $35 million related to legal fees, lease terminations and store closure reserve adjustments; tax charges from repatriation of Canadian cash; and a LIFO charge.
Fourth-quarter sales rose 2.3% to $1.8 billion, while comp sales, excluding the negative impact of foreign currency translation, fell 0.7%, and IDs dropped 2%.
For the fiscal year, net income rose 28.2% to $146.8 million and sales increased 1% to $8 billion, while comps fell 2.6% and ID's dropped 3.7% after excluding the negative impact of foreign currency translation.
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|*THE YEAR-AGO FOURTH QUARTER HAD ONE-TIME CHARGES TOTALING $35 MILLION, OR 15 CENTS PER SHARE.|