Whole Foods on Wednesday reported a quarterly profit that topped Wall Street expectations and shares of the organic and natural grocery chain rose in extended trading.
As traditional supermarkets and big-box retailers muscle into the organic category, Whole Foods’ sales growth has slowed and it has been fighting to more sharply define what sets it apart.
That has meant trying to stay ahead of trends, such as giving customers more information about where its products come from. Last month, for instance, it introduced a ranking system that labels produce as “good,” ”better” or “best” based on the supplier’s farming practices. It plans to label all products that have genetically modified ingredients by 2018.
Whole Foods also recently began offering one-hour delivery in 15 major markets and is installing community spaces at some locations, including an outdoor putting green at its store in the golf-centric community of Augusta, Georgia.
Additionally, the grocer is trying to appeal to a broader audience by shaking its “Whole Paycheck” image. To bring down its prices, the company has been pushing its store brands, such as its 365 Everyday Value line.
The company, which has 400 locations, said it sees potential for 1,200 locations in the United States over the long term.
Whole Foods Market Inc. earned $128 million, or 35 cents per share, for the most recent quarter. That tops the 32 cents per share analysts expected, according to FactSet. A year ago, it earned $121 million, or 32 cents per share.
Revenue rose 9.4 per cent to $3.26 billion, in line with Wall Street expectations.
The company said that sales rose 3.1 per cent at established locations during its fiscal fourth quarter, which ran through Sept. 28. Looking ahead to its next fiscal year, it said it expects the figure to rise in the low- to mid-single digits.
Whole Foods also hiked its dividend by a penny to 13 cents.
Shares of the Austin, Texas-based company rose 7.8 per cent to $43.12 in aftermarket trading.