Whole Foods (NASDAQ: WFMI) Reports Diluted EPS of $0.25
Dallas, TX 8/05/2009 10:32 PM GMT (TransWorldNews)
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Whole Foods Market, Inc. (NASDAQ: WFMI) recently reported results for the third quarter ended July 5, 2009. Sales for the quarter increased 2% to $1.9 billion. Comparable store sales decreased 2.5% versus a 2.6% increase in the prior year. Identical store sales, excluding nine relocations and two major expansions, decreased 3.8% versus a 1.9% increase in the prior year.
Excluding the negative impact of foreign currency translation, comparable store sales decreased 2.0%, and identical store sales decreased 3.3%. “We are very pleased with our third quarter top-line and bottom-line results. We saw our first sequential improvement in comparable store and identical store sales trends in six quarters driven by both average transaction count and basket size trends,” said John Mackey, chairman, chief executive officer, and co-founder of Whole Foods Market. “We believe we are continuing to strike the right balance between sales and gross margin while exhibiting strong cost control, producing a 23% increase in income from operations. We also generated $93 million of free cash flow, ending the quarter with $448 million in total cash and $335 million available on our credit line.”
As previously announced on June 1, the Federal Trade Commission approved a final consent providing resolution to the antitrust challenge of the Company’s acquisition of Wild Oats Markets, Inc. Under the terms of the agreement, a third-party divestiture trustee was appointed to market for sale: leases and related assets for 19 non-operating former Wild Oats stores; leases and related fixed assets (excluding inventory) for 12 operating acquired Wild Oats stores and one operating Whole Foods Market store; and Wild Oats® trademarks and other intellectual property associated with the Wild Oats stores. For any good faith offers not finalized by September 6, 2009, an extension of up to six months may be granted. This twelve-month period may be extended further to allow the FTC to approve any purchase agreements submitted within that
time period. The only other obligations imposed on the Company by the settlement agreement are in support of the divestiture trustee process.
Pursuant to the FTC’s approval of the final consent order in the third quarter, the Company recorded a non-cash impairment charge of $4.8 million to adjust the carrying value of leases and fixed assets to fair value relating to the potential sale of certain operating stores. The Company’s previously announced estimate was up to $5.5 million. Cash expenses relating to legal and trustee fees are not expected to be material. No additional material charges are expected related to the 19 non-operating properties for which a lease liability reserve is already recorded, or related to the trademarks which have been fully amortized.
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