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Whole Foods disappoints Wall Street with Q4 results; opens 12 stores

BY Dan Berthiaume

Austin, Texas – Whole Foods Market disappointed Wall Street analysts with its fourth quarter results despite posting increases in net income, sales and same-store sales. During the fourth quarter of fiscal 2013, Whole Foods posted net income of $121 million, up 7% from $113 million in the same quarter a year earlier.

In addition, Whole Foods reported quarterly sales of $2.98 billion, up roughly 2.5% from $2.91 billion. And same-store sales rose 5.9%. However, same-store sales growth was less than anticipated and the company lowered guidance for sales and same-store sales growth, disappointing Wall Street investors and observers.

For the entire fiscal year 2013, Whole Foods reported net income of $551 million, up 18% from $466 million in the previous fiscal year. Net sales totaled $12.9 billion, up 10% from $11.7 billion, and a 6.9% increase in same-store sales.

In the long term, Whole Foods thinks it has market potential for 1,000 stores in the U.S., and also has potential in Canada and the U.K. The company opened 12 stores in the fourth quarter, resulting in 32 store openings in the fiscal year. In the first quarter of fiscal year 2014, the Whole Foods has opened five stores so far and expects to open five additional stores. The company currently has 367 stores open totaling approximately 13.9 million sq. ft.

Whole Foods recently signed 14 new leases averaging 38,000 sq. ft. in size in Andersonville, Ill.; Chicago; Shreveport, La.; Beverly, Mass.; Portsmouth, N.H.; Clark, N.J.; Newark, N.J.; Dayton, Ohio; Allentown, Pa.; Hilton Head, S.C.; Germantown, Tenn.; The Woodlands, Texas; and Washington, D.C. (two leases). These stores currently are scheduled to open in fiscal year 2014 and beyond.

"We reported record fourth quarter operating results which contributed to the best fiscal year performance in our company’s 35-year history,” said John Mackey, co-founder and co-CEO of Whole Foods Market. “For the last four years, we have increased our new store openings while producing improvements in operating margin and higher returns on invested capital, and we expect these trends to continue in fiscal year 2014. We are dedicated to providing our communities with fresh, healthy, natural and organic food, and with 94 leases in our development pipeline, we look forward to delivering accelerating new store growth for several years to come."

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What went wrong for Walmart in India

BY CSA STAFF

Walmart split with its Indian joint venture partner of seven years recently and the smart folks at the University of Pennsylvania Wharton School of Business put the situation in perspective and offered insight into future possibilities for a market that still boasts more than 1 billion potential consumers and promising long-term prospects.

After a seven-year partnership, Walmart and Indian retail partner Bharti Enterprises last month issued a terse joint message saying they were ending the 50/50 joint venture launched by the two firms in 2006 and had reached an agreement to independently own their business interests in India, the Wharton article explains. The move wasn’t entirely unexpected. Days before the statement was released, Walmart Asia CEO Scott Price told the media during an Asia-Pacific Economic Cooperation meeting in Bali that “the existing franchise to Bharti is not tenable as the base” for Walmart in India. Both sides were looking at the best way to move forward, he added.

Click here for a thorough understanding of the dynamics of the Indian market.

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Walmart’s inventory priorities for 2014 on tap at DBB

BY CSA STAFF

Leveraging inventory while driving consumption is the topic of a presentation scheduled for next week in Northwest Arkansas by Walmart’s senior director of consumables replenishment Kendall Trainor.

Trainor is the featured speaker at a breakfast meeting organized by Doing Business in Bentonville. From 7-9 a.m. Wednesday, November 13, Trainor will share insights on Walmart’s top five inventory priorities for the coming fiscal year.

Those priorities include driving in-stock, delivering on inventory turn objectives, achieving new store success, executing seasonal programs and implementing a global replenishment system (GRS). Trainor is also expected to help attendees understand what Walmart’s best-in-class suppliers are doing above and beyond the retailer’s baseline expectations.

Click here for more information.

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