Driven by higher sales fueled by rebounding consumer confidence, Whole Foods Market (WFMI) revealed late Wednesday a stronger-than-expected 78% improvement in first-quarter profit, sending its shares more than 8% higher after hours.
The largest seller of organic foods reported an 80% increase in earnings available to common shareholders of $88.7 million, or 51 cents a share, compared with $49.7 million, or 32 cents a share, in the same quarter last year.
Analysts polled by Thomson Reuters had been expected earnings of 45 cents.
Revenue for the Austin-based company climbed 14% to $3 billion, beating the Street's view of $2.98 billion. Sales were driven by a 9.1% increase in comparable-store sales.
Earnings were helped by a net interest income of $300,000, up from a net interest expense of $8.8 million in the year-earlier period, due primarily to a $326 million decrease in total debt and a $186 million increase in cash and investments.
“Our identical store sales growth continued to gain momentum for the fifth consecutive quarter on both a one- and two-year basis and at 9.1% is the highest we have produced in over four years,” said Walter Robb, co-chief executive of Whole Foods.
Based on the company’s strong results, and what Robb called “ongoing signs of increasing consumer confidence,” the company raised its sales and earnings outlook for the year, now expecting same store sales growth in the range of 7% to 9%, up from its earlier outlook of 5% to 7% growth.
The company sees total sales up 10.7% to 12.8%, up from 10% to 12%. Earnings are expected to be in the range of $1.76 to $1.80 a share, from its earlier forecast of $1.66 to $1.71 a share.