Whole Foods Market disappoints
Whole Foods Market on Wednesday reported a disappointing first quarter and also lowered full-year sales and earnings guidance.
Net income was $95 million for the quarter ended Jan. 15. The company earned an adjusted 39 cents a share during the quarter, in line with estimates.
Total sales in the quarter increased 1.9% to $4.9 billion, less than the Street expected.
Same-store sales decreased 2.4%, also lower than expected. It was the chain’s sixth consecutive comp sales decline.
Whole Foods has found itself challenged as much lower-priced competitors such as Aldi increase their organic and fresh offerings.
“In this increasingly competitive marketplace, we are committed to taking every step necessary to improve comps and deliver higher returns for our shareholders,” said John Mackey, co-founder and CEO of Whole Foods Market. “To this end, we are refining our growth strategy, refocusing our efforts on best serving our core customers, and moving faster to fully implement category management. Evolving our purchasing operating model while developing data-rich, customer-centric category management capabilities is critical to our go-forward merchandising, pricing, marketing and affinity strategies."
In the quarter, Whole Foods opened 13 stores, including two relocations. So far in the second quarter, it has opened three stores, including one relocation, and expects to open three additional stores, including one relocation.
Whole Foods said it recently terminated two leases and signed four new leases. It currently has 93 stores in development.
The company reduced its outlook for the full year based on slower sales growth and additional costs. It now expects sales growth of "1.5% or greater," compared with its prior forecast of a 2.5% to 4.5% increase.
The retailer said it expects to earn $1.33 a share "or greater," compared with $1.42 a share previously.
For some reason, price is my guess, Whole Foods just isn't our go to store with lower priced grocery stores more widely available, we just never think of Whole Foods at all.