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Whole Foods Net Income More Than Doubles in 2Q

Thursday, 13 May 2010 08:34 AM

Whole Foods Market Inc. said stronger sales helped more than double its second-quarter net income as shoppers flocked to the natural and organic grocery chain.

The company also raised its full-year guidance on Wednesday, saying it has emerged from the recession as a healthier business.

"We believe the best is yet to come for Whole Foods Market," John Mackey, co-founder of the company, said.

Whole Foods had been hit hard during the recession as shoppers cut back on spending. The company retooled — cutting costs, limiting its growth and adding lower-priced offerings in to draw shoppers.

The efforts paid off as the company has seen several quarters of improved profit, sales and a stronger balance sheet.

Whole Foods, based in Austin, Texas, reported net income of $67.5 million, or 39 cents per share for the second quarter. That's up from the $27.3 million, or 19 cents per share, earned in the same quarter last year.

Revenue rose more than 13 percent to $2.1 billion.

The results beat analyst expectations of 33 cents per share on revenue of $2 billion, according to a poll by Thomson Reuters.

Whole Foods says shoppers are still focused on getting good deals but they are realizing how much value they can get in the stores, which were once known primarily for their high-end goods and prices to match. Shoppers also are showing signs of loosening their purse strings as they buy a wider array of products and trade up to higher priced items in certain categories.

"It was a couple of really tough years," Mackey said. "We do feel a sense of relief and now we feel almost euphoric."

Sales at stores open at least a year, considered a key indicator of a retailer's performance, rose 8.7 percent. And Mackey said the key sales measure is continuing to accelerate during the first few weeks of the third quarter.

Mackey said he is "cautiously bullish" looking forward and the company now expects to earn $1.33 to $1.37 per share for the year, up from its previous guidance of $1.20 to $1.25.

Whole Foods also announced Wednesday that it has promoted President Walter Robb to share the CEO job with Mackey. Robb has served as co-president and chief operating officer with A.C. Gallo. Gallo will serve as the company's sole president and chief operating officer.

Shares of Whole Foods rose $2.05, more than 5 percent, to $42.40 in after-hours trading.

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Whole Foods Market Inc. said stronger sales helped more than double its second-quarter net income as shoppers flocked to the natural and organic grocery chain.The company also raised its full-year guidance on Wednesday, saying it has emerged from the recession as a...
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Thursday, 13 May 2010 08:34 AM
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