Whole Foods profit slides
The grocer’s disappointing results come as it opens a store in downtown L.A.
Whole Foods Market Inc. said its latest quarterly profit fell by more than half as it faces intense competition, with organic foods becoming more widely available.
The Austin, Texas, company said Wednesday that it earned $56 million, or 16 cents a share, in its fiscal fourth quarter, compared with $128 million, or 35 cents a share, a year earlier.
The earnings included $80 million in charges for restructuring and asset impairment costs, which analysts sometimes exclude in their predictions. Excluding those items, profit came to 30 cents a share.
The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 35 cents a share.
The grocery chain’s revenue rose 6% to $3.44 billion, which fell short of analyst forecasts of $3.48 billion.
Sales in locations open at least a year — a key metric of a retailer’s health — were virtually flat, dropping 0.2%.
Whole Foods also announced plans to return more money to shareholders. Its board authorized a buyback plan of up to $1 billion, bringing the total amount available for repurchases to $1.3 billion. And it raised its quarterly dividend 4%, to 13.5 cents.
For the fiscal year that ended Sept. 27, the company earned $536 million, or $1.48 a share, on revenue of $15.39 billion.
Revenue at established stores rose 2.5%.
Whole Foods forecast sales growth of 3% to 5% this fiscal year, down from 8% last year.
It expects to open about 30 new stores, including three 365 stores — its lower-price division with smaller stores.
On Wednesday, Whole Foods opened a new market at 8th Street and Grand Avenue in downtown Los Angeles.
Shares slid more than 7% in afterhours trading to $28.47. Whole Foods shares have declined 39% since the beginning of the year, while the Standard & Poor’s 500 index has risen 2%.