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TheStreet Open House

Whole Foods Market Reports First Quarter Results

Stock quotes in this article: WFM

The following table shows the Company's comparable store sales results for the last two quarters and for the first three weeks of the current second quarter. Sales of a store are deemed to be comparable commencing in the 53rd full week after the store opened. 

  Comparable Store Sales Growth Change in Transactions Change in Basket Size
Q4 ended September 29, 2013 5.9% 3.5% 2.5%
Q1 ended January 19, 2014 5.4% 3.1% 2.3%
Q2 through February 9, 2014 5.6% -- --

For the quarter, gross profit increased six basis points to 35.0% of sales due to lower occupancy costs as a percentage of sales, which partially offset a slight increase in cost of goods sold as a percentage of sales. Direct store expenses increased three basis points to 25.4% of sales, with leverage in wages offset by an increase in healthcare costs as a percentage of sales. As a result, store contribution improved three basis points to 9.6% of sales.

For identical stores, gross profit improved 18 basis points to 35.2% of sales, direct store expenses improved 31 basis points to 25.0% of sales, and store contribution improved 49 basis points to 10.1% of sales.

G&A increased 11 basis points to 3.1% of sales due primarily to increased investments in technology.

Additional information on the quarter for comparable stores and all stores is provided in the following table.

Comparable Stores Comps ROIC* # of Stores Average Size Total Square Feet
Over 15 years old (19 years old, s.f. weighted) 3.2% 115% 90 28,000 2,536,000
Between 11 and 15 years old 3.2% 92% 69 34,000 2,333,000
Between eight and 11 years old 3.0% 88% 48 42,000 2,022,000
Between five and eight years old 7.3% 44% 54 54,000 2,905,000
Between two and five years old 6.6% 26% 49 44,000 2,139,000
Less than two years old (including six relocations) 19.5% 12% 34 36,000 1,234,000
All comparable stores (9.6 years old, s.f. weighted) 5.4% 56% 344 38,000 13,169,000
All stores (8.9 years old, s.f. weighted)   47% 371 38,000 14,155,000
* Defined as annualized store-level income after taxes divided by average invested capital; does not reflect any as-if effect of capitalizing operating leases

Growth and Development

The Company opened 10 stores in the first quarter and has opened two stores so far in the second quarter, expanding into five new markets. One additional store is expected to open in the second quarter, with another 20 to 25 stores expected in the second half of the year. The Company currently has 373 stores totaling approximately 14.2 million square feet and considers 1,200 stores to be a reasonable indication of its market opportunity in the United States over the long term.

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