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TheStreet Open House

Whole Foods Market Reports Third Quarter Results

Based on its year-to-date results and updated assumptions for the fourth quarter, the Company is raising its EPS range to $1.45 to $1.46. On a 52-week to 52-week basis, the Company now expects diluted earnings per share growth of 17% to 18% on sales growth of approximately 13%. 

The Company continues to expect a significant year-over-over increase in pre-opening and relocation expense in the fourth quarter based on the opening of 12 new stores along with a high number of openings in the first quarter of 2014. 

For fiscal year 2014, the Company expects sales growth of 12% to14%, comparable store sales growth of 6.5% to 8.0%, and identical store sales growth of 6.0% to 7.5%. The Company expects diluted earnings per share of $1.69 to $1.72, an increase of 17% to 18% over expected fiscal year 2013 EPS of $1.45 to $1.46.  The Company expects ending square footage growth of 8% to 9% based on the opening of 33 to 38 new stores, two to three of which will be relocations. 

  FY13 FY13 Q3 YTD Q4
   Prior Outlook Current Outlook Actuals Implied Outlook
Sales growth 10% - 11%* 11%* 13% 3% - 4%*
Comparable store sales growth 6.7% - 7.5% 7.2% - 7.3% 7.2% 7.0% - 7.5%
Two-year comps 15.5% - 16.2% 15.9% - 16.0% 16% 15.5% - 16.0%
Identical store sales growth 6.5% - 7.2% 6.8% - 7.0% 6.9% 6.5% - 7.0%
Two-year idents 14.8% - 15.6% 15.2% - 15.3% 15.3% 14.8% - 15.3%
Three-year idents 23.2% - 23.9% 23.6% - 23.7% 23.7% 23.2% - 23.7%
         
Number of new stores 32 32 20 12
% of sales from new stores 6% 6% 6% 6%
Ending square footage growth 8% 8% 7% 8%
         
G&A expenses 3.1% 3.1% 3.0% 3.2%
Pre-opening and relocation costs $69 - $72 mil $68 - $70 mil $46 mil $22 - $24 mil
Operating margin 6.7% 6.8% 7% 6.1% - 6.2%
EBITDA $1.19 - $1.20 bil $1.20 - $1.21 bil $948 mil $255 - $260 mil
         
Tax rate 38.5% 38.5% 38.5% 38.5%
Diluted shares outstanding 375 mil 375 mil 374 mil 376 mil
         
Diluted EPS $1.43 - $1.45 $1.45 - $1.46 $1.15 $0.30 - $0.31
YOY % change 13% - 15%* 15% - 16%* 20% 0% - 4%*
         
Capital expenditures $565 - $615 mil $525 - $550 mil $377 mil $148 - $173 mil
         
*Growth rates reflect the extra week in fiscal year 2012.        
On a 52-week to 52-week basis:        
Sales growth 12% - 14% 13% 13% 12%
Operating income before pre-opening 18% - 20% 20% - 21% 21% 16% -20%
Diluted EPS growth 15% - 17% 17% - 18% 20% 7% - 11%
         
  The following table provides information about the Company's estimated store openings through fiscal year 2014.         
         
      Average Square Ending Square
  Estimated Openings Relocations  Feet per Store  Footage Growth
Fiscal year 2013 32 5 35,000 8%
Fiscal year 2014 33 - 38 2 - 3 38,000 8% - 9%

Over the long term, the Company considers 1,000 stores to be a reasonable indication of its market opportunity in the United States as the Whole Foods Market brand continues to strengthen, consumer demand for natural and organic products continues to increase, and the Company's flexibility on new store size opens up additional market opportunities. The Company believes Canada and the United Kingdom hold great promise as well.

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