Whole Foods Market, Inc. (NASDAQ: WFM) is a natural and organic foods supermarket, with 309 stores located in the United States, Canada and the United Kingdom.
The company recently reported its Q3 earnings, showing robust sales growth, both on an absolute and same store sales basis.
Sales for the quarter increased 11% to $2.4 billion. Comparable store sales increased 8.4%, or 17.2% on a two-year stacked basis. Identical store sales, excluding four relocations and one expansion, increased 8.1%, or 16.5% on a two-year stacked basis.
The company attributes this growth to gains in market share. According to co-CEO Walter Robb:
We are continuing to gain market share at a faster rate than most public food retailers as reflected in our 8.5% comparable store sales growth year to date. We attribute much of our success to our value efforts, which have improved our price image, and to continuing to raise the bar in areas that matter to our customers, particularly quality standards and health and wellness
The company is bullish on its own future, increasing its guidance for the full year, and pointing to its long-term target store count:
Based on its third quarter results and updated assumptions for the fourth quarter, the Company is raising its diluted earnings per share range for fiscal year 2011 to $1.91 to $1.92, an increase of 34% year over year. The Company also is providing its initial outlook for fiscal year 2012. …
Over the long term, the Company considers 1,000 stores to be a reasonable indication of its market opportunity in the United States as the Whole Foods Market brand continues to strengthen, consumer demand for natural and organic products continues to increase, and the Company’s flexibility on new store size opens up additional market opportunities. The Company believes Canada and the United Kingdomhold great promise as well.
MarketWatch noted that the company’s cash balance continues to rise:
Whole Foods Markets Inc. is sitting on a bigger cash stockpile, money it can tap to reaccelerate store growth and pay dividends as it continues to win over well-to-do shoppers in a sluggish economy. …
The company’s growing free cash flow — a key barometer of corporate health — is helping fuel the expansion. For the 40 weeks ended July 3, free cash flow rose 24% to $324 million over the year-ago period.
Two Covestor models held WFM as of 7/27:
- Fortune’s Most Admired Companies
- Identifying Turning Points
Sources:
“Whole Foods Market Reports Third Quarter Results” WFM Press Release. https://seekingalpha.com/news-article/1522372-whole-foods-market-reports-third-quarter-results
“Whole Foods grows its cash stockpile” MarketWatch, 7/27. https://www.marketwatch.com/story/whole-foods-grows-its-cash-stockpile-2011-07-27
