Whole Foods (WFM) will now be controlled by its birth father John Mackey.
The prominent exec departures come after Whole Foods announced yet another disastrous quarter amid greater competition in the organic food retailing space. Whole Foods reported fourth-quarter earnings of 28 cents a share, surpassing forecasts for 24 cents a share. Same-store sales fell 2.6%, compared to Wall Street's forecasts for a 2.1% drop. The company said earnings for its new fiscal year would be about $1.42 a share, down from $1.55 a share in just finished reporting period. Same-store sales are seen unchanged to down as much as 2%.
Shares of Whole Foods spiked about 4% in after-hours trading on the news. But, the results suggest Mackey has his work cut out for him in restoring investor confidence.
1. Same-store sales are still plunging.
Whole Foods said same-store sales declined 2.6% in the quarter even as it ratcheted up promotions in produce, meat and dairy to be more competitive with its new rivals. The result worsened from the first three weeks of the quarter when Whole Foods said its sales were down about 2.4%.
Even as it continued to lower prices on consumer staples, Whole Foods saw the number of transactions decline 4.2% in the quarter -- in the third quarter, transactions declined 2.7%. Whole Foods same-store sales have now fallen in six straight quarters, according to Bloomberg data.
For the first five weeks of the fourth fiscal quarter, Whole Foods said same-store sales have dropped 1.6%, which may reinforce Wall Street's concerns about the company's fundamentals.
2. Profit margins are under siege.
Whole Foods' discounting took its toll on profit yet again. Gross profit margin declined 53 basis points year over year to 33.9% in the quarter.
3. Outlook is lackluster.
Earnings for the fiscal fourth year are seen at $1.42 a share, below Wall Street estimates of $1.47 a share.