Whole Foods Posts 26 Percent Earnings Growth in 1Q; Prepares to Enter New Markets

AUSTIN, Texas -- Leading organic and natural foods retailer Whole Foods Market, Inc. yesterday posted higher sales and earnings for the 16-week quarter ended Jan. 15, 2006. The chain also said it has signed 10 new store leases, which include the following new markets: Napa and Sonoma, Calif.; Wellington, Fla.; Honolulu, Hawaii; Northbrook, Ill.; Reno, Nev.; and Richmond, Va.

For the quarter, sales jumped 22 percent to $1.7 billion, with comparable sales growth of 13 percent. Net income increased 26 percent to $58.3 million.

"We are very pleased with the 22 percent sales growth and 26 percent net income growth we produced in the first quarter," said John Mackey, chairman, c.e.o., and co-founder of Whole Foods, in a statement. "Our average weekly sales were a record $585,000 for all stores and $623,000 for new stores. Our 13 percent comparable-store sales growth this quarter marked our ninth consecutive quarter of double-digit comparable-store sales growth, and despite the fact that our average store size continues to grow, our annualized sales per gross square feet increased to an all-time high of just over $900."

The retailer attributed the sales increase to its 15 percent weighted average square footage growth and comparable-store sales growth of 13 percent. The increase in comparable-store sales came from a 7 percent increase in the number of customer transactions and a 6 percent increase in the average value per transaction, Whole Foods said.

Sales in identical stores (excluding two relocated stores) were up 12 percent for the quarter. Comparable- and identical-store sales exclude the company's two stores in New Orleans and Metairie, as they weren't fully operational during the quarter due to damage from Hurricane Katrina.

In the first quarter the company opened five new stores, in Atlanta; Jericho, N.Y.; West Palm Beach, Fla.; West Hartford, Conn.; and Denver, Colo. So far in the second quarter, the company has relocated one store in Alexandria, Va., reopened its New Orleans store, and acquired one small store in Portland, Maine, which the company plans to relocate to a larger store currently in development.

Whole Foods said it expects to open two additional stores and reopen the Metairie, La. store during the second quarter.

Meanwhile the company recently signed 10 new store leases, representing a total of approximately 535,000 square feet, in Northbrook, Ill. (60,000 square feet); Seattle (46,000 square feet); Wellington, Fla. (50,000 square feet); Sonoma, Calif. (29,000 square feet); Chicago (80,000 square feet); Honolulu, Hawaii (67,000 square feet); Philadelphia (60,000 square feet); Napa, Calif. (35,000 square feet); Richmond, Va. (60,000 square feet); and Reno, Nev. (50,000 square feet).

Whole Foods currently has 181 stores in the United States, Canada, and the United Kingdom.
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