Whole Foods on Wednesday said it was eliminating its co-CEO structure, with John Mackey to take over as sole CEO effective Dec. 31 and Walter Robb remaining as a member of its board of directors.
Mackey and Robb had served as co-CEOs for six years.
The company also announced Wednesday that EVP and CFO Glenda Flanagan would retire from the role after 29 years at the end of the coming 2017 fiscal year, and that Mary Ellen Coe, VP of sales and product operations for Google, has joined the Whole Foods Market board of directors.
Those announcements came as the retailer posted fourth-quarter results that were below analyst estimates, with comparable-store sales for the 12-week quarter falling by 2.6% on a 4.2% traffic decrease at its stores. The comp decline exceeded consensus estimates of a 2.1% dip, although total sales of $3.5 billion met expectations. Sales were up by 1.7% from the same period last year.
Net income of $88 million, or 28 cents a share, increased by 57.1% from the same period last year. The EPS figure was higher than the 24 cents analysts had anticipated.
Whole Foods said its comp decline had slowed through the first weeks of the current first quarter, showing a 1.6% dip through Oct. 30.
Robb, a 25-year veteran of Whole Foods, will remain on the board and continue to serve as chairman for both Whole Kids Foundation and Whole Cities Foundation.
“It is impossible to convey what Walter has done for Whole Foods Market since he joined us in 1991,” Mackey said in a statement. “His incredible passion for retail and sense of the customer makes him the most extraordinary retailer I’ve had the privilege to work with. During his 25 years of leadership, Walter has been an advocate for the Whole Foods Market culture and a champion for our Team Members. His genuine love for our mission and our team members truly reflects what it means to be a conscious leader.”
Flanagan, whom Whole Foods said was the longest ever serving female CFO in the Fortune 500, will retire from the role after 29 years at the end of the 2017 fiscal year. She will continue to serve the company in a senior advisor capacity.
“Glenda joined Whole Foods Market in 1988 and has helped guide us through significant growth from six stores to 464 stores and more than $15 billion in sales today,” said Mackey and Robb in a statement. “She has been an outstanding CFO. Her intelligence, wisdom, business acumen, kindness, and integrity have been at the heart of everything Whole Foods Market has done and accomplished over the past 28 years. Glenda is deeply loved and respected by us and everyone at Whole Foods Market who has had the opportunity to know her.”
For fiscal 2017, Whole Foods said it was targeting sales growth of 2.5% to 4.5% and comps in the range of -2% to flat. It said it intended to grow square footage by 6% during the year reflecting 30 new stores including six relocations and four new 365 stores.
"The company has seen stability in comps over the last two quarters and an improvement in trends quarter to date for both traffic and basket size," it said in a statement. "The company is encouraged that its value and marketing efforts appear to be gaining traction with customers and believes it will see momentum as its sales-building initiatives are rolled out throughout the year. The competitive landscape is very dynamic, however, and it is uncertain how long the deflationary environment will continue. The high end of the comp range reflects a -2.5% two-year comp, slightly better than the -2.8% in 4Q, while the low end reflects the possibility that two-year trends could get marginally worse before they get better, as the company has seen quarter to date."
