Wednesday, natural and organic foods supermarket Whole Foods Market, Inc. (WFMI) reported a significantly higher profit for the fourth quarter, helped by increased sales and lower expenses related to relocation and closure of stores. In addition, the company provided earnings guidance for fiscal year 2010, which is below Consensus, sending the shares down by more than 8% in after-hours trading.
The Austin, Texas-based company's income available to common shareholders surged to $28.67 million or $0.20 per share from $1.50 million or $0.01 per share for the same quarter last year. Excluding preferred dividends of $7.74 million, the company's net income was $36.41 million. Earlier, while reporting third quarter results, the company had expected fourth-quarter earnings per share of $0.16 - $0.18.
On average, 17 analysts polled by Thomson Reuters expected the company to earn $0.18 per share for the quarter. Analysts' estimates typically exclude special items.
The company's third-quarter EBITDA rose to $131.18 million from $82.38 million, and adjusted EBITDA increased to $133.53 million from $91.47 million last year. Excluding LIFO benefit of $3.42 million, share-based payments expense of $3.97 million and deferred rent of $8.73 million, the company's EBITANCE was $142.80 million, up from $106.32 million for the year-ago period.
Sales for the quarter increased to $1.83 billion from $1.79 billion for the year-ago period. Analysts expected the company to report revenues of $1.84 billion for the quarter.
Comparable store sales decreased by 0.9% compared with 0.4% rise for the prior year period. However, identical store sales, excluding eight re-locations and two major expansions decreased 2.3% and excluding the negative impact of foreign currency translation, comparable store sales decreased 0.7%.
In the sequentially preceding third quarter, the company had reported a slight rise in net income available to common shareholders to $34.97 million or $0.25 per share from $33.92 million or $0.24 per share in the year-ago quarter. Revenues increased 2% to $1.88 billion from $1.84 billion in the prior-year quarter.
For the quarter under review, operating income rose to $68.78 million from $22.55 million last year, and operating income before pre-opening and store closure was $82.63 million, up from $64.86 million a year earlier.
Costs related to relocation, store closure and lease termination for the third quarter fell to $3.25 million from $27.16 million last year. Pre-opening expenses also dropped to $10.60 million from $15.15 million last year.
During the quarter the company's cash flow significantly improved and generated free cash flow of $50.52 million, as net cash provided by operating activities rose to $113 million from $63.61 million for the same period last year.
For the fiscal year 2009, the company's net income available to common shareholders rose slightly to $118.75 million or $0.85 per share from $114.52 million or $0.82 per share for the same period last year. Sales for the full year rose to $8.03 billion from $7.95 billion for the year earlier period.
Amongst others in the industry, Grocery stores operator Supervalu Inc. (SVU) reported a 42.2% fall in second-quarter profit, hurt by lower sales and margins. The net income was $74 million or $0.35 per share, down from $128 million or $0.60 per share in the last year. Supervalu's net sales decreased to $9.46 billion from $10.23 billion a year ago.
For the first five weeks of the first quarter, Whole Foods' total sales increased by 5% year-over-year. Comparable store sales increased by 1.6% and identical store sales increased 0.4%.
Looking ahead to the full year 2010, Whole Foods expects earnings in the range of $1.05 - $1.10 per share, while analysts currently anticipate that the company will earn $1.11 per share. Further, the company expects sales growth of 5% to 8%, comparable store sales growth of 1% to 4% and identical store sales growth of 0% to 3% for the next year.
In the fiscal year 2010, the company expects to open 16 new stores, 10 of which are expected to open in the first half of the year.
WFMI closed Wednesday's regular trading at $32.06, unchanged from previous sessions closing price, on a volume of 4.11 million shares. In after hours, the stock is trading at $29.23, down more than 8% on the Nasdaq. In the last 52-week period, the stock trended in a range of $7.04 - $34.40, with a three-month average volume of 2.44 million shares.
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