Whole Foods results point to challenges ahead for Amazon
In one of its last earnings reports as a standalone company, Whole Foods Market released fiscal third-quarter results Wednesday that pointed to some of the challenges its likely new owner, Amazon, will face.
While Whole Foods had record sales of $3.7 billion, up $22 million, during the quarter ended July 2, sales at stores open at least a year — a measure that takes the addition of new stores out of the equation — dropped 1.9% compared with the same quarter last year.
Net income for the quarter was off as well, falling to $106 million from $120 million.
The drop was indicative of the competition Whole Foods faces from big-box competitors such as Costco, as well as discounters such as Aldi, Sprouts and Trader Joe’s. CEO John Mackey was upbeat. “For the quarter, we delivered record sales and free cash flow, and returned $44 million in dividends to our shareholders,” he said in a statement.
Amazon, the online sales giant, signed a deal last month to buy Austin-based Whole Foods for $13.7 billion. With no other potential bidders having come forward, the sale is likely to close by the end of the year.
Whole Foods shares closed at $41.81, up 6 cents and near the $42 a share Amazon offered to buy the chain, which has more than 465 stores in the U.S., Canada and the United Kingdom.