Whole Foods Promotes Two, Posts Record Q2 Earnings

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Whole Foods Promotes Two, Posts Record Q2 Earnings

Whole Foods Market, Inc. has promoted Walter Robb and A.C. Gallo, who have shared the positions of president and COO since October 2004. Robb has now become co-CEO and will join the company’s board of directors, while Gallo has become Whole Foods’ sole president and COO.

The grocer’s co-founder, John Mackey, will remain as co-CEO. The company’s executive team, which consists of Mackey, Robb, Gallo, EVP and CFO Glenda Chamberlain and EVP of growth and business development Jim Sud, has worked closely together since 2001 and will continue their collaborative management approach. Additionally, Robb and Gallo will continue to oversee Whole Foods’ 12 operating regions, in addition to purchasing, distribution, marketing and quality standards.

“Walter and A.C. are brilliant retailers, and their contributions to Whole Foods Market’s success have been immeasurable,” said Mackey. “Due in large part to their operational leadership, we successfully managed through 2009, the most difficult year in our company’s 30-year history. In proposing these changes to our board of directors, my goal was to establish the structure necessary to solidify our executive leadership team for what is hopefully many years to come.”

After 14 years in the natural foods business as a retailer and consultant, Robb joined Whole Foods in 1991, after selling his operating lease for the future Whole Foods store in Mill Valley, Calif., to the company. Rising through the ranks, Robb joined the executive team as EVP of operations in 2001. He became co-chief operating officer in 2003 and co-president in 2004. As co-president and co-chief operating officer, Robb was responsible for six of the company’s 12 regions, along with purchasing, marketing, distribution and quality standards.

For 15 years, Gallo worked at Bread & Circus, which was acquired by Whole Foods in 1992. He became VP of the Northeast region in 1994 and then president in 1996. Gallo came to the executive leadership team as EVP of operations in 2001. He became co-CEO in 2003 and co-president the following year. In that combined position, Gallo had oversight of six of the company’s 12 regions, as well as purchasing, marketing, distribution and quality standards.

The promotions took place against a backdrop of record financial results for the Austin, Texas-based grocer. Whole Foods reported that sales for the 12-week second quarter ended April 11, 2010 increased 13 percent to $2.1 billion, while comps went up 8.7 percent, or 3.9 percent on a two-year stacked basis. Identical-store sales, excluding four relocations, rose 7.7 percent, or 1.9 percent on a two-year stacked basis. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 40 percent to $182.3 million. Income available to common shareholders jumped 147 percent to $67.5 million, and diluted earnings per share skyrocketed 102 percent to 39 cents per diluted share.

“Our second-quarter results are the best we have reported in several years, with extremely strong growth in comparable-store sales, earnings and cash flow,” noted Mackey. “We have successfully emerged from this recession with a healthier balance sheet and better capital disciplines. Our new stores are performing very well, and we look forward to rebuilding our store development pipeline and re-accelerating our square-footage growth in the future.”