AUSTIN, Texas – Whole Foods says its sales at established locations slipped in its fiscal first quarter and forecast the figure to be flat to down 2 per cent for the year, as it works to keep prices down and fend off rivals.
The Austin, Texas company noted that its comparable store sales have been “particularly difficult to predict” given the competitive environment. Whole Foods has been under pressure as organic foods and products marketed as natural have become increasingly mainstream, with big-box retailers such as Target and Wal-Mart devoting more space to such items.
That has prompted Whole Foods to try and appeal to a broader customer base by keeping prices down. On Wednesday, it announced the launch of its digital coupons on its mobile app.
For the three months ended Jan. 17, the company said sales fell at 1.8 per cent at stores open at least 57 weeks. The figure is considered a key metric of health because it strips out the volatility of new and closed locations.
Whole Foods, which has more than 430 stores in the U.S., Canada and the United Kingdom, says it still sees potential for 1,200 locations in just the U.S. A newer branch of “365” stores it is opening that focuses more heavily on value can expand on that footprint, the company says.
Profit for the quarter ended Jan. 17 fell to $157 million, or 46 cents per share. But that was more than the 40 cents per share analysts expected, according to Zacks Investment Research, and its stock rose nearly 3 per cent to $29.75 in after-hours trading.
Total revenue rose to $4.83 billion in the period, boosted by new store openings. The results were above the $4.81 Wall Street expected.
Whole Foods Market Inc. shares have dropped 14 per cent since the beginning of the year, while the Standard & Poor’s 500 index has declined slightly more than 9 per cent. In the final minutes of trading on Wednesday, shares hit $28.87, a decrease of 46 per cent in the last 12 months.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on WFM at http://www.zacks.com/ap/WFM
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