whole foods at mid-year
Post on 17-Aug-2014
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3 Things You Need to Know
Whole Foods at Mid-Year
1) Disappointing Earnings
After years of same-store-sales growth above 6%, Whole Foods reported that the metric fell to 5.9% during the fourth quarter of 2013, and 4.5% at the beginning of this year.
Additionally, earnings came in below analyst expectations for both quarters.
Management made clear that competition was being felt in slower sales, and that the company would be lowering prices to compete on costs with others entering the organic field.
Wall Street Hasn’t Been Happy
2) Ramping up Store Openings
Earlier this year, co-CEOs Walter Robb and John Mackey announced that they believed the U.S. could support 1,200 Whole Foods locations, up 20% from previous estimates. Currently, there are 374 locations.
During the first quarter earnings release, management laid out the blueprint for further expansion.In 2014, open 37 locations, bringing count to
398.In 2015, open 42 locations, bringing count to
436.In 2016, open 46 locations, bringing count to
478.In 2017, open 50 locations, bringing count to
524.In 2018, open 55 locations, bringing count to
Expansion Plans Ramp Up
3) What to Watch: Can Management Deliver on Growth, Same-Store-Sales Plans?
Store Build-OutWhole Foods has its
work cut out to meet these lofty goals.
When the company reports earnings, check to make sure it still believes there will be 398 locations by the end of fiscal 2014.
In order to meet expectations, Whole Foods needs to show growth in this metric of roughly 5.4%.
Anything above 5.5% would be a huge positive.
Will Management Deliver?Same-Store-Sales
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