Whole Foods Sees Strongest Quarterly ID Sales Jump in Years

Whole Foods Market, Inc. saw its identical store sales increase for its fifth straight quarter, and by the highest percentage it has grown in four years, the natural and organic foods retailer said during its quarterly earnings conference call yesterday.

"Our identical store sales growth continued to gain momentum for the fifth consecutive quarter on both a one- and two-year basis and at 9.1 percent is the highest we have produced in over four years," said Walter Robb, co-CEO of Whole Foods. "Based on our consistently strong top- and bottom-line results, along with ongoing signs of increasing consumer confidence, we are raising our sales and earnings outlook for the year. Our new range for identical store sales growth of 7 percent to 9 percent appropriately reflects that we have yet to cycle over our toughest comparisons, while also allowing for the possibility that our 9 percent year-to-date results could be sustainable especially given the likelihood of some positive impact from inflation."

Sales for the quarter increased 14 percent to $3 billion. Earnings before interest, taxes, depreciation and amortization (EBITD) increased 26 percent from the prior year to $234.3 million, and earnings per share increased 59 percent to 51 cents. Results included a LIFO charge of $2 million versus $0.2 million in the prior year; relocation, store closure and lease termination costs of $3.1 million versus $12.4 million in the prior year; and net interest income of $0.3 million versus net interest expense of $8.8 million in the prior year.

During the first quarter, Whole Foods opened three stores and expanded one store by 29,000 square feet. It expects to open three new stores, including one relocation, in the second quarter. The company currently has 302 stores totaling approximately 11.4 million square feet.

Since the fourth quarter earnings release, the Company reduced the size of one store in development by 11,100 square feet and terminated the lease for one store in development totaling 45,000 square feet. The Company also recently signed six new leases in Ottawa, Canada; Danbury, CT; Jamaica Plain, MA; Lynnfield, MA; Marlboro, NJ; and San Antonio, TX. These stores currently are scheduled to open in fiscal year 2012 and beyond.

Austin, Texas-based Whole Foods operates 302 stores in the United States, Canada, and the United Kingdom.