US natural and organic foods retailer Whole Foods Market has reported a sharp fall in fourth-quarter net income, hit by costs associated with the impact of Hurricane Katrina and a higher tax rate.
Net income was US$9.1m, or 13 cents per share, for the quarter to 25 September, compared to $28.2m, or 43 cents per share, in the year-ago period. Sales rose to $1.1bn from $927.3m a year earlier, driven by 12% weighted average square footage growth and comparable store sales growth of 13.4%. The company estimated the negative sales impact from Hurricane Katrina was in line with its previously announced estimate of $5m to $6m.
Whole Foods has two stores in the New Orleans area which were damaged by and closed due to Hurricane Katrina, and accordingly the company recorded a charge of $16.5m in the fourth quarter for related estimated net losses.
For the full-year, net income was $136.4m, or $198 per share, compared to $129.5m, or $1.98 per share, in the previous year. Sales rose to $4.7bn from $3.9bn a year earlier.
“In fiscal 2005, we produced very strong operating results that exceeded our own expectations and our initial guidance, and returned over $55m to our shareholders. We are confident in our growth potential and our ability to execute on that growth potential, and as such we have increased our sales growth guidance for next fiscal year to 18-21% and our 2010 sales goal from $10b to $12bn,” said John Mackey, chairman, chief executive officer and co-founder of Whole Foods Market.