Whole Foods Market “ Whole Foods, Whole People, Whole Planet ” Hiroko Takashima.

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<ul><li><p>Whole Foods Market</p><p> Whole Foods, Whole People, Whole Planet Hiroko Takashima</p></li><li><p>*U.S. sales of organic food and beverages is growingU.S.sales of organic food and beverages: $26.7 billion in 2010 (cf. $6 billion in 2000)</p><p>Represented 7.7% growth over 2009 sales</p><p>Approximately 4% of U.S. overall food and beverage sales in 2010</p><p>Over 11% of all U.S. fruit and vegetable sales</p></li><li><p>*Whole Foods Market : Products &amp; ServicesFounded in 1978 and is headquartered in Austin, Texas.</p><p>Operating natural and organic food supermarkets</p><p>Operated 316 stores (as of November 2, 2011)the U.S. (303), Canada (7), and the U.K (6)</p><p>Annual sales: $10 billion in 2011Full Time Employees: 48,200[Shop sketch image]</p></li><li><p>*Whole Foods Market : Features1. Specialty for natural and organic foodsGood partnerships with vendors and suppliersMake a plan to open 1,000 stores in the U.S. in the future (CEO Walter Robb said) </p><p>2. Team Member HappinessRanked for 15 Years on FORTUNE's "100 Best Companies to Work For" ListProvides health care at no cost to full-time team membersAll employees (except temporary) are eligible to receive stock optionsHigh salary (ex: Associate Store Team Leader $80,199/annual average)</p><p>3. Satisfied and Delighted CustomersRely on word-of-mouth recommendations from the shoppersConnect with the customers through social media websites</p></li><li><p>*Features: Team Member HappinessFORTUNE's "100 Best Companies to Work For" List 2012http://money.cnn.com/magazines/fortune/best-companies/2012/</p></li><li><p>*Features: Satisfied and Delighted Customers1. Rely on word-of-mouth recommendations from the shoppersSpend much less on advertising and marketing, About 0.4% of the total sales in fiscal year 2010</p><p>2. Connect with the customers through social media websites, in addition to e-newsletters, the corporate website and blogOver 2.1 million followers on TwitterOver 780,000 fans on FacebookMany stores have set up their own Facebook and Twitter accountshttp://www.facebook.com/wholefoods</p></li><li><p>*Competitive Comparison in Financial StatementWhole Foods Market</p><p>[Strength]Higher revenue growth rateMuch higher margin</p><p>[Weakness]Very high P/E ratio Source: Yahoo finance Direct Competitor Comparison (as of January 23, 2012) Competitor: Kroger, Safeway </p><p>[Strength]Big enterprise scale</p><p>[Weakness]Lower revenue growth and lower margin, even less than the industry average</p><p>Whole FoodsMarketThe KrogerSafewayIndustry : Grocery StoresMarket Cap:13.66B13.87B7.65B8.53BEmployees:48,200338,000180,00081.00KQtrly Rev Growth (yoy):12.2%10.3%7.1%11.4%Revenue (ttm):10.11B88.99B42.84B10.11BGross Margin (ttm):35.0%21.7%28.6%25.6%EBITDA (ttm):844.24M3.94B2.38B844.24MOperating Margin (ttm):5.5%2.6%2.9%3.9%Net Income (ttm):342.61M1.18B529.00MN/AEPS (ttm):1.931.941.481.6P/E (ttm):39.4412.4515.0718.05</p></li><li><p>*Whole Foods Market: Stock Chart (for 2 years)The stock price (WFM) is going up with some fluctuation.Source: Yahoo finance (as of January 23, 2012) Raises FY 2011 Guidance; Raises FY 2011 Comparable Store Sales GuidanceRaises FY 2011 EPS Guidance </p></li><li><p>*Stock Chart Compare to Major Supermarkets (for 2 years)WFM stock price increased by over 150% (even though Costco increased by 50%)Other competitors stock prices fluctuated or remained steadySource: Yahoo finance (as of January 23, 2012) Whole Foods (WFM)CostcoKrogerWal-MartSafeway</p></li><li><p>*Conclusion:Q1: Is Whole Foods Market undervalued or overvalued ?</p><p>My opinion : In the long-term view, valued price</p><p>Analyst opinion is belowSource: Yahoo finance as of Jan.25, 2012, Data provided by Thomson/First call</p><p>Price Target SummaryMean Target:$77.82Median Target:$80High Target:$90Low Target:$62</p></li><li><p>*Conclusion:Q2. Now is it a good time to buy Whole Foods Market ?</p><p>My opinion: Yes! Why?1. Organic foods sales growth ($26.7 billion in 2010 </p></li></ul>