Whole Foods profit falls


POSTED: Thursday, May 14, 2009

PORTLAND, Ore. » Whole Foods Market Inc. said yesterday that its quarterly profit fell 32 percent as shoppers spent conservatively during the recession, but the results narrowly beat Wall Street expectations.

The Austin-based company earned $27.3 million, or 19 cents a share, for the quarter that ended April 12, down from $40 million, or 29 cents a share, for the quarter last year. Sales were flat at $1.86 billion.

Analysts expected the company to earn 18 cents per share on revenue of $1.87 billion.

The company said cost-controls and steps to appeal to more value-oriented shoppers helped results for the quarter, and it reaffirmed its full-year outlook.

Whole Foods has one store at Kahala Mall, with three more planned for Hawaii over the next two years — at Kahului, Ward and Kailua. The store in Kahului, Maui, is under construction, and expected to open next year, while the store in Kailua is expected to open in fall 2011. The store at Ward has been delayed until General Growth Properties resolves its liens with contractors.

Same-store sales, or sales at stores open at least a year, decreased 4.8 percent in the quarter, versus a 6.7 percent increase in the prior year period. Same-store sales are considered a key measure of a retailer's performance.

The company said it has seen the biggest same-store sales drops in markets hit hardest by unemployment and weak housing markets.

Across the nation, Whole Foods shoppers focused their buying on its lower-priced items. In the first four weeks of the third quarter, while comparable store sales are still down, the company said its results have improved from the second quarter.

“;While it is still too early to say our sales are stabilizing, we are encouraged by these improving trends,”; CEO John Mackey said.

Whole Foods, known more for high-end goods than low prices, thrived in better economic times. But as consumers dialed back their spending at Whole Foods during the recession, the company increased the store brands on its shelves and other value options. It marketed its deals heavily, trying to draw consumers back.