AUSTIN, Texas -- Whole Foods Market here said last week an expanding customer base led to strong sales and earnings gains in the first quarter ended Jan. 20.
The company reported comp-store gains of 9.4%, with a net income of $20.1 million, a 34% increase. Sales jumped 21% to $780 million.
In a conference call last week following the release of these results, John Mackey, chairman, president and chief executive officer, said the company attracted many new shoppers in the quarter and sales will continue to increase as they become more accustomed to all that Whole Foods offers.
"New shoppers have yet to discover all parts of our store and do not yet do a 'full shop,' creating a great opportunity for us to sell more to each of these new customers through proactive approaches," Mackey said. "We believe that when the economy improves we can maintain our customer count and increase our average basket size proportionally."
Walter Robb, executive vice president of operations, said the company has seen the highest comparable growth in its perishables departments, which he attributed to trading down among customers who used to eat at restaurants but are now buying prepared foods.
Whole Foods declared a 1 cent-per-share charge due to a fire in an Evanston, Ill., store during the quarter that caused a total loss of inventory. The company also upheld previously stated sales-growth guidance of 15% to 20% for the fiscal year, which will be helped by several new store openings. Jim Sud, executive vice president of growth and business development, said the company has "20 new stores in the pipeline." The company said its capital expenditures will be between $180 million and $200 million for the year.
Andrew Wolf, an analyst with BB&T Capital Markets, Richmond, Va., told SN that Whole Foods' numbers signal a potential for an extended growth period. "This is a very productive phase for the company, the best performance since 1998, when the economy was much better," Wolf said.
Jonathan Ziegler, San Francisco-based managing director with Deutsche Banc Alex. Brown, New York, said, "Comparisons will get tougher in the second half as stores mature. But I see nothing but more positive things coming from this company. From an expanded rollout of private label, there are a lot of opportunities for growth."
