Whole Foods Market, Inc., reported a 35 percent surge in quarterly earnings and raised its 2011 profit forecast, boasting that it will accelerate store openings as it gains customers from other food retailers.
Walter Robb, Whole Foods’ co-chief executive officer, attributed recent growth to the high-end grocer’s “value” efforts that have “improved our price image,” according to a July 27 statement.
“We are continuing to gain market share at a faster rate than most public food retailers,” Robb said in the statement. The company is “continuing to raise the bar in areas that matter to our customers,” including quality standards and health and wellness, he said.
Traditional supermarket chains have struggled to emerge from the 2008-09 recession, with many of their middle- to lower-income customers squeezed by persistently high unemployment and soaring gasoline prices. Whole Foods has fared better, its more affluent customers willing to pay higher prices for organic milk, grass-fed beef and other foods.
Whole Foods, based in Austin, Tex., said comparable-store sales during the three months ended July 3 rose 8.4 percent compared with the same period a year earlier.
For Whole Foods’ fiscal 2011, which ends in October, comparable-store sales are projected to rise 8.5 percent to 8.7 percent, compared with a previous forecast for 7.9 percent to 8.9 percent growth, the company said. In 2012, Whole Foods projected 6.8 percent to 8.8 percent sales growth.
Among other large chains, Kroger Inc.’s identical-store sales rose 4.6 percent excluding fuel in its most-recent quarter, while Safeway, Inc.’s sales rose 0.5 percent and Supervalu Inc.’s fell 3.9 percent. Identical or comparable-store sales are a closely-followed gauge of retailer performance and typically reflect locations open at least one year.
Whole Foods operates 309 stores in the U.S., Canada and UK, and expects to open 61 additional stores through fiscal 2013
During the quarter, Whole Foods posted net income of $88.5 million, up from $65.7 million during the same period a year earlier, the company said. Sales rose 14 percent, to $2.99 billion.
Whole Foods also boosted its per-share earnings forecast for 2011 to $1.91 to $1.92 from $1.87 to $1.90 previously. In 2012, the company projects earning of $2.21 to $2.26 per share.
In trading July 28, Whole Foods shares rose $1.68, or 2.6 percent, to $67.11, up 70 percent over the past year.