Whole Foods Rides MomentumWhole Foods Rides Momentum
March 28, 2005
Whole Foods Rides Momentum
Maintainingfiscal 2004 momentum, Whole Foods Market (NASDAQ:WFMI) posted big top and bottomline gains for its first quarter ended Jan. 16. Sale jumped 22 percent to $1.37billion, while earnings rose 27 percent to $49.1 million or $0.73 per dilutedshare compared to the same period last year. This builds on the momentum offiscal 2004, for which sales grew 23 percent to almost $4 billion, and samestore comps rose to a record 14.9 percent. For the first quarter 2005, compsgrew 11.4 percent.
Despite the high, WFMI leadership tempered expectations forthe coming year. We do not expect to see this same level of yearover- yearincreases in sales and earnings to continue throughout the year, said JohnMackey, chairman and chief executive officer. We continue to expect comparable store sales increases forthe year of 8 percent to 10 percent and for diluted earnings per share growth tobe lower than sales growth primarily due to the anticipated acceleration of newstore openings.
At $56 million, new development expenditures accounted forabout two-thirds of capital spending for the quarter. The company opened threestores during the quarter and has plans to open at least seven additional newstores this year. Management noted margins in new stores are lower than in olderstores, which impacts diluted earnings, as will projected 2005 pre-openingexpenses in the range of $18 million to $20 million. Also impacting remaining2005 results will be $4 million in expenses related to the January 2005relocation of company headquarters to a new downtown Austin facilitya200,000-square-foot building accompanied by an 80,000-square-foot store, a25,000-square-foot public roof garden and a community education center.
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