Whole Foods Profit Falls on Wild Oats Acquisition Costs
Austin, Texas, Whole Foods Market Inc. said Tuesday that its fiscal fourth-quarter profit fell 15% from a year ago, as it spent more on opening new stores and ran up legal fees in its fight to acquire rival Wild Oats Markets Inc. Same-store sales rose 8.2% in the quarter ended Sept. 30.
Whole Foods earned $33.9 million in its fourth quarter, down from $39.8 million a year earlier. Legal bills and the costs of integrating Wild Oats increased costs by $13 million.
Revenue rose 35% to $1.74 billion. Excluding the Wild Oats stores, sales rose 16% to about $1.6 billion.
Analysts forecast $1.62 billion in sales. Same-store sales rose 8.2% in the quarter ended Sept. 30.
The September quarter was the last in Whole Foods' fiscal year, which was less profitable than the previous year.
For the year, the retailer earned $182.7 million on sales of $6.59 billion, compared with $203.8 million profit on lower revenue, $5.61 billion, in the previous 12 months.
Chairman and chief Executive John Mackey said his company had succeeded in boosting sales at the Wild Oats stores. He said they would approach Whole Foods locations in sales per square foot after the company finishes spending $40 million to $50 million renovating the Oats locations in about a year.
Whole Foods has closed nine Wild Oats stores and plans to shutter eight of the remaining 63 that are near new Whole Foods locations, Mackey said. Whole Foods sold 35 Henry's and Sun Harvest stores that came with Wild Oats for $166 million.