US natural and organic foods retailer Wild Oats Markets has reported a wider third-quarter net loss, as margins were pressured by investments in pricing and promotions to build sales in regions affected by ongoing competition.
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The company posted a net loss of US$6.1m, or 21 cents per share, for the third quarter to 25 September, compared to a net loss of $0.86m, or 3 cents per share, in the year-ago period. The third-quarter 2004 results include around $2.1m in pre-tax restructuring charges primarily related to the company’s reorganisation and the closure of two stores and $1.4m in other non-recurring charges partly related to costs to complete the review.
Net sales in the third quarter of 2004 increased 5.8% to $250.7m, compared to $237.0m in the third quarter of 2003. The year-on-year sales increase was driven by 12 new stores, which offset the closure of seven stores in the year, two of which were relocations. Comparable store sales declined 0.6% in the third quarter of 2004, compared with an increase of 0.8% in last year’s third quarter. As previously announced, intense competition in certain geographic regions – primarily Southern California and Texas – caused negative comparable store sales throughout the third quarter in approximately one-third of the company’s store base.
“Our results for the third quarter were unsatisfactory, but we believe we needed to take aggressive action to build our customer traffic and sales back in regions affected by intense competitive activity,” said Perry D. Odak, president and chief executive officer.
“The investments we are making in pricing and promotions have begun to drive sales improvement in the fourth quarter. We are encouraged by this momentum and will continue to invest in our business in the fourth quarter to ultimately drive profitable growth for Wild Oats Markets,” Odak added.
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