Whole Foods Markets, the natural and organic retail chain, has revealed that first quarter profits sagged despite revenue and same-store sales gains.
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The Austin, Texas-based retailer posted earnings totalling US$53.8m, or $0.38 per share, for the quarter ended 14 January, down from profits of $58.3m, or $0.40 per share, for the comparable period of last year.
Revenue increased 12%, rising to $1.87bn from $1.67bn a year ago, while same-store sales were up 7%. This compares to a 13% increase in the prior year.
Whole Foods has seen growth slow of late despite increased demand for organic and natural foods, primarily due to increased competition from Wal-Mart and traditional supermarkets in this sector.
In order to boost its scale and sharpen its competitive edge, in a separate announcement Whole Foods revealed that it has entered into a deal to acquire rival natural and organic chain Wild Oats Markers.
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By GlobalData“We are pleased with our 7% comparable store sales growth in the first quarter, which was in line with our expectations and against a tough 13% comparison in the prior year,” said John Mackey, chairman, chief executive officer and co-founder of Whole Foods Market.
“We are producing higher sales growth, comps and sales per square foot than our public competitors. Given our record store development pipeline, continued anticipated acceleration in store openings, and now the announcement of our pending merger with Wild Oats Markets, we believe we are even better positioned to achieve our goal of $12b in sales in fiscal year 2010. Over the longer term, however, we believe our sales potential is much greater as the market continues to grow and as our company continues to improve,” he concluded.
