Whole Foods Boosts Wellness

ELLIOT ZWIEBACH

AUSTIN, Texas — Whole Foods Market here said last week it plans to open “wellness clubs” at five of its stores before the end of 2011 to help educate consumers about healthier lifestyles.

The clubs will be located at single stores in New York, Chicago, Boston, Oakland, Calif., and Princeton, N.J., “and if the prototypes do well, we would open more in 2012 as part of a growth initiative,” John Mackey, chairman and co-chief executive officer, told analysts during a conference call.

“Our purpose would be to educate people how to eat better to achieve the highest degree of their health potential,” he explained.

The clubs will be located within existing space at existing stores, he noted.

“We still have some bugs to work out of the concept, but we see a lot of opportunity for steady growth over the next several years,” Mackey said.

The first wellness clubs will open in June or July, with others to follow at the rate of one per month, with all five scheduled to be open by the end of the year, he added.

For the 16-week first quarter that ended Jan. 16, Whole Foods said net income increased 61% to $88.7 million, while sales rose 13.8% to $3 billion, and identical-store sales jumped 9.1%. For the first three weeks of the second quarter, ID sales were up 8.6%.

Edward Aaron, an analyst with RBC Capital Markets, New York, said the strong quarter-to-date results “demonstrate that the company is powering through tougher comparisons. But for all intents and purposes, this story is back to what it was in its heyday — high single-digit comps on top of high single-digit comps but with better leverage and generally stronger new-store productivity.”

The company raised its financial outlook for the year, with earnings per share growth projected in the range of $1.76 to $1.80, up from the previous range of $1.66 to $1.71; sales growth of 10.7% to 12.8%, compared with the previous range of 10% to 12%; and ID sales growth of 7.2% to 9.2%, compared with previous guidance of 5.5% to 7.5%.