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Whole Foods Market (WFM) Misses Q3 EPS by 1c, Sees FY15 Comp Sales Growth in Low Single Digits

July 29, 2015 4:05 PM

(Updated - July 29, 2015 4:10 PM EDT)

Whole Foods Market (NASDAQ: WFM) reported Q3 EPS of $0.44, $0.01 worse than the analyst estimate of $0.45. Revenue for the quarter came in at $3.63 billion versus the consensus estimate of $3.69 billion.

Comparable store sales on a constant currency basis increased 1.3%.

"In the third quarter, our sales increased 8% to a record $3.6 billion translating to healthy EBITDA margin and return on invested capital," said Walter Robb, co-chief executive officer of Whole Foods Market. "A strong balance sheet and cash flow of $1 billion year to date have enabled us to self-fund our new store development and strategic growth initiatives while returning over $325 million to our shareholders through dividends and share repurchases." "In this rapidly changing marketplace, we believe we are taking the necessary steps to position ourselves for the longer term," added Robb. "We remain focused on innovating and evolving to best serve our customers' diverse purchasing preferences. From the unique experience of our Whole Foods Market stores, to our growing online channel for home delivery, to the exciting launch of our 365 by Whole Foods Market stores, we are making investments to extend our reach to both new and existing customers."

Comparable StoreIncrease inIncrease in
Sales GrowthTransactionsBasket Size
Q2 ended April 12, 20153.1%0.7%2.4%
Q3 ended July 5, 20152.2%0.5%1.7%
Q2 - last nine weeks ended April 12, 20152.4%
Q3 - first 10 weeks ended June 21, 20152.6%
Q3 - last two weeks ended July 5, 20150.4%*
Q4 - first three weeks ended July 26, 20150.6%

Fourth Quarter and Fiscal Year 2015 Outlook

If current comparable store sales growth trends continue, the Company would expect sales growth of approximately 7% and diluted earnings per share of $0.34 to $0.35 in the fourth quarter. The Company has opened two new stores and expects to open eight additional stores, including one relocation.

The Company notes that average weekly sales and gross margin are lowest in the fourth fiscal quarter due to seasonally slower sales during the summer months. In addition, results in the fourth quarter of the prior year included a LIFO charge of $5 million.

For fiscal year 2015, the Company expects:

  • Sales growth of approximately 9%
  • Comparable store sales growth in the low single digits
  • Square footage growth of 10% based on 38 new stores, including five relocations
  • EBITDA margin of approximately 9%
  • ROIC greater than 14%

(Street sees Q4 EPS of $0.38 on revenue of $3.59 billion)

For earnings history and earnings-related data on Whole Foods Market (WFM) click here.

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