Competition Slams Whole Foods' Same-Stores Sales, Shares Drop

EarningsReuters

Whole Foods Market Inc on Wednesday said same-store sales contracted in the fiscal fourth quarter, as it grapples with competition among its own stores and from mainstream retailers.

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Whole Foods, which is battling to lower prices while maintaining its position as a high-quality retailer, has become one of the biggest turnaround stories in the U.S. food sector.

The Austin, Texas-based chain's same-store sales, a closely watched performance gauge for retailers, fell 0.2% for the fourth quarter that ended Sept. 27. Analysts polled by Consensus Metrix expected a 0.7% gain.

This quarter's same-store sales through Nov. 1 were down 2.1%.

Those sales were up 1.3 percent for the third quarter, 3.6% in the second quarter and 4.5% in the first quarter of 2015.

The deceleration has troubled investors in Whole Foods, which is fighting to keep a grip on the natural and organic grocery category it pioneered and long dominated.

The retailer's fourth-quarter net income fell to $56 million, or 16 cents per share, from $128 million, or 35 cents per share, a year earlier.

Results from the latest quarter included a non-cash asset impairment charge of 8 cents per share and a restructuring charge of 6 cents per share.

Whole Foods also announced a $1 billion stock buyback program, dividend increase and capital structure plan.

Shares in the company fell 4.1% to $29.50 in extended trading.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Andrew Hay and Alan Crosby)

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