Whole Foods Comps Jump 13%

AUSTIN, TX-Whole Foods Market Inc. continued to deliver strong financial performance during the most recent quarter, achieving double-digit sales, net income and comp-store sales increases.

During the quarter, sales increased 22% to $1.7 billion; net income increased 26% to $58.3 million; and comp-store sales increased 13%. The quarter marked the chain’s ninth consecutive quarter of double-digit comparable store sales growth.

The chain posted a record high in sales per week of $585,000 for all stores and $623,000 for new stores. Whole Food’s attributed the comp-store sales increase to a 7% increase in the number of customer transactions and a 6% increase in the average value per transaction.

During the quarter, Whole Foods opened five new stores. They are in Atlanta; Jericho, NY; West Palm Beach, FL; West Hartford, CT; and Denver. During the past 12 months, the chain has opened 18 new stores, bringing its total to 178.

Whole Foods is continuing its expansion and recently signed 10 new store leases representing a total of approximately 535,000 sf in: Northbrook, IL; Seattle; Wellington, FL; Sonoma, CA; Chicago; Honolulu; Philadelphia; Napa, CA; Richmond, VA; and Reno, NV.

“We are particularly excited about our 80,000-sf site in Chicago, which will be a relocation of our highly successful Lincoln Park store, as well as the signing of our first store in Hawaii,” said John Mackey, chairman, CEO and co-founder of Whole Foods Market, during the chain’s earnings conference call.

Mackey said that the company has announced seven or more newly signed leases in each of the past 10 quarters and now has 72 stores and four million sf under development through 2009, representing 66% of its existing square footage.

“We are confident about the potential future returns of larger stores, as we believe they appeal to a broader customer base, take longer to reach maximum capacity, and are less vulnerable to competition as they create a higher barrier to entry,” Mackey said, adding that the chain currently operates eight stores within the 60,000 sf to 80,000 sf range, with an additional 25 stores of that size in development, including eight relocations.

During the past five years, Whole Foods has produced average sales growth, comp-store sales growth and weighted average sf growth of 21%, 11% and 14%, respectively. The chain said in a statement that it expects sales growth of from 18% to 21% in 2006, up from store sales growth of between 8% and 11% the previous year, plus sf growth of roughly 14%.

“Given our current sales momentum and record store-development pipeline, we believe we are well-positioned to achieve our goal of $12 billion in sales by the year 2010,” Mackey said. “Over the longer term, however, we believe the sales potential for Whole Foods Market is much greater than $12 billion as the market continues to grow and as our brand continues to strengthen.”