Streak now stands at two years after 1.9% same-stores decline; CEO notes late burst
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 27, 2017).
Whole Foods Market Inc. said Wednesday that comparable sales fell again in the latest quarter, extending a streak going back two years as the natural grocer faced up to tougher competition.
Same-store sales fell by 1.9% during its fiscal third quarter ended July 2, compared with a year ago. Whole Foods plans to sell itself to Amazon.com, and has promised to reverse the sales losses by the end of its current fiscal year in September.
John Mackey, the company's chief executive and co-founder, said same-store sales turned positive in the last three weeks of July.
"Our comparable store sales improved," Mr. Mackey said.
The company's stock was flat in intra-day trading at $41.82, a slight dip from the $42 a share Amazon offered to acquire the company last month for a total of $13.7 billion, including debt. The merger would be the third-largest retail tie-up in the U.S. since 1995, according to Dealogic.
Whole Foods reported several hours ahead of schedule after a J.P. Morgan Securities LLC analyst released some of the company's earnings numbers in a research note.
A Whole Foods spokeswoman said an earnings table was inadvertently posted on the company's website while testing its "functionality." It was removed minutes later. The company decided to release its results two hours later.
The company skipped an investor call on Wednesday because of the pending deal.
Net profit fell to $106 million in the quarter from $120 million a year earlier. Per share earnings dipped to 33 cents from 37 cents. Earnings-per-share and same-store sales beat forecasts.
Earlier this year, Whole Foods faced demands from activist investors to explore a sale and replace its board among other issues. Mr. Mackey forged the deal with Amazon in part because they saw that partnership as more favorable than contending with the activist demands, according to a corporate filing.
Investors are expected to vote on the deal on Aug. 23. Hedge fund Jana Partners LLC fund sold its nearly 9% stake in Whole Foods last week for a profit of roughly $300 million. Mutual-fund manager Neuberger Berman still owns a roughly 2.7% stake, making it Whole Foods's sixth-largest investor, according to FactSet.
Roughly a dozen members of Congress have called for a close review of the Whole Foods-Amazon deal. The Consumer Watchdog group is lobbying the Federal Trade Commission to block it on allegations that Amazon's pricing discounts are misleading.
An Amazon spokesman said those assertions "are flat out wrong."
--Laura Stevens contributed to this article.
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(END) Dow Jones Newswires
July 27, 2017 02:47 ET (06:47 GMT)