Whole Foods Market Inc. (WFM) Tuesday reported a 26 percent jump in second-quarter profit, as the grocery chain benefited from increased demand for its natural and organic food products, with new store openings adding more punch to results. Due to the strong earnings, the company raised its outlook for fiscal year 2013.
Whole Foods stock gained more than 8 percent in after-hours trade on the Nasdaq, following the announcement of results.
Whole Foods results come as health conscious consumers prefer organically made food products. However, stiff competition from the likes of Kroger and other chains has cast pricing pressures on the sector.
Austin, Texas-based Whole Foods posted quarterly net income of $142 million or $0.76 per share, compared with $118 million or $0.64 per share last year.
On average, 24 analysts polled by Thomson Reuters expected earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude one-time items.
Sales for the quarter climbed 13 percent to $3.03 billion from $2.67 billion in the prior year. Analysts had consensus revenue estimate of $3.03 billion for the quarter.
On a same store basis, sales were up 6.9 percent, and identical store sales, excluding four relocations and one expansion, grew 6.6 percent.
Gross margin for the quarter expanded five basis points to 36.4 percent, led by an improvement in occupancy costs.
For fiscal year 2013, Whole Foods now estimate earnings of $2.86 to $2.89 per share, up from its prior range of of $2.83 to $2.87 per share. Analysts currently expect earnings of $2.87 per share for the year.
The company continues to project sales growth in the range of 12 to 14 percent on a 52-week to 52-week basis.
Whole Foods board has approved a two-for-one stock split of its outstanding common stock, to be effected through a stock dividend. Shareholders of record May 17 will be entitled to a stock dividend on May 29 of one additional common share for each share held.
Whole Foods stock closed Tuesday at $92.80, up 1.09%, on a volume of about 5 million shares. In after hours, the stock gained $7.70 or 8.30%. In the past year, the stock has traded in a range of $81.39 - $101.86.
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