Whole Foods Market, Inc. (WFM) Misses Q2 EPS by 3c; Guides Below the Street
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Whole Foods Market, Inc. (NASDAQ: WFM) reported Q2 EPS of $0.38, $0.03 worse than the analyst estimate of $0.41. Revenue for the quarter came in at $3.3 billion versus the consensus estimate of $3.34 billion.
"The rapidly growing demand for fresh, healthy foods affirms our mission for the last 36 years and highlights the increasing growth opportunity ahead of us," said John Mackey, co-founder and co-chief executive officer of Whole Foods Market. "Whole Foods Market is the premier brand in natural and organic foods, with unparalleled quality standards and the broadest selection. As we continue to innovate and evolve at a fast pace, we are confident in our ability to gain market share and expect our sales to approach $25 billion over the next five years."
Whole Foods Market, Inc. sees FY2014 EPS of $1.52-$1.56, versus the consensus of $1.61. Based on the Company's year-to-date sales and earnings results and updated assumptions for the remainder of the year, the Company is revising its fiscal year 2014 outlook as shown in the following table. The Company now expects sales growth of approximately 11%, comparable store sales growth of 5.0% to 5.5%.
The Company now expects capital expenditures of $675 to $725 million, reflecting increased spending on technology and remodels, including acquired locations.
| FY14 | FY14 | Q2 YTD | Q3-Q4 | |
| Prior Outlook | Current Outlook | Actual | Implied Outlook | |
| Sales growth | 11% - 12% | 10.5% - 11.0% | 10% | 11.5% - 12.5% |
| Comparable store sales growth | 5.5% - 6.2% | 5.0% - 5.5% | 5.0% | 5.0% - 6.0% |
| Two-year comps | 12.4% - 13.1% | 11.9% - 12.4% | 12.1% | 11.8% - 12.8% |
| Number of new and acquired stores | 33 - 38 | 36 - 39 | 13 | 23 - 26 |
| % of sales from new and acquired stores | 6% | 6.0% - 6.5% | 6.0% | 6.5% - 7.0% |
| Ending square footage growth | 8% - 10% | 9% - 10% | 8% | 9% - 10% |
| G&A expenses | 3.1% | 3.1% | 3.2% | 3.1% |
| Operating income before pre-opening growth | 9% - 14% | 6% - 9% | 5% | 6% - 12% |
| Pre-opening and relocation costs | $75 - $78 mil | $75 - $78 mil | $34 mil | $41 - $44 mil |
| Operating margin | 6.7% - 7.0% | 6.5% - 6.6% | 6.4% | 6.5% - 6.8% |
| EBITDA | $1.32 - $1.37 bil | $1.29 - $1.32 bil | $684 mil | $609 - $634 mil |
| EBITDA margin | 9.3% - 9.5% | 9.0% - 9.2% | 9.0% | 9.0% - 9.3% |
| Tax rate | 38.8% - 39.0% | 39.0% | 39.0% | 39.0% |
| Diluted EPS | $1.58 - $1.65 | $1.52 - $1.56 | $0.80 | $0.72 - $0.76 |
| EPS growth | 7% - 12% | 3% - 6% | 4% | 3% - 9% |
| Capital expenditures | $600 - $650 mil | $675 - $725 mil | $362 mil | $313 - $363 mil |
The following table provides information about the Company's estimated store growth, including acquired and relocated stores.
| Estimated Store Growth | Ending Store Count | Ending Gross Square Footage | Ending Square Footage Growth | |
| Fiscal Year 2014 | 36 - 39 | 397 - 400 | 15.1 - 15.2 mil | 9% - 10% |
| Fiscal Year 2015 | 38 - 45 | 432 - 440 | 16.5 - 16.8 mil | 9% - 11% |
For earnings history and earnings-related data on Whole Foods Market, Inc. (WFM) click here.
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