Whole Foods Market said Wednesday that same-store sales during its fiscal third quarter remained in negative territory, but improved sequentially, and that the momentum has since turned comps positive in the current fourth quarter.
Earnings in the meantime slowed as a result of higher costs associated with its recently announced strategic plan and falling comps. Total sales for the quarter, which ended July 2, ticked up 0.6% to $3.7 billion. Net income of $106 million was down 11.7%.
Whole Foods, which in June agreed to be acquired by Amazon for $13.7 billion, did not hold a call to discuss results. “For the quarter, we delivered record sales and free cash flow, and returned $44 million in dividends to our shareholders,” John Mackey, co-founder and CEO, said in a statement. “Our comparable store sales improved sequentially on a one- and two-year basis in the third quarter, and that momentum has accelerated 220 basis points in the fourth quarter, resulting in positive overall comps for the first three weeks.”
Prior to the Amazon announcement, Whole Foods announced a range of strategic initiatives designed to return the company to positive sales and earning growth by the end of fiscal 2018, but warned they would come at a price.
Both comps and earnings per share were slightly above consensus estimates, and taken with better results from Supervalu and Smart & Final reported over similar periods this week, may indicate the industry has endured the worst of deflation.