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Whole Foods Market Inc. (WFMI) Reports Operating Results (10-K)

November 23, 2011 | About:
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10qk

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Whole Foods Market Inc. (WFMI) filed Annual Report for the period ended 2011-09-25.

Whole Foods Market Inc. has a market cap of $2.68 billion; its shares were traded at around $0 with a P/E ratio of 17.6. The dividend yield of Whole Foods Market Inc. stocks is 4.3%.

Highlight of Business Operations:

Sales totaled approximately $10.11 billion, $9.01 billion and $8.03 billion in fiscal years 2011, 2010 and 2009, respectively, representing increases of 12.2%, 12.1% and 1.0% over the previous fiscal years, respectively. Comparable store sales increased approximately 8.5% and 7.1% in fiscal years 2011 and 2010, respectively, and decreased approximately 3.1% in fiscal year 2009. Identical store sales increased approximately 8.4% and 6.5% in fiscal years 2011 and 2010, respectively, and decreased approximately 4.3% in fiscal year 2009. As of September 25, 2011, there were 298 locations in the comparable store base. Identical store sales in fiscal years 2011, 2010 and 2009 exclude from the comparable calculation 6, 6 and 12 store relocations, respectively, and 1, 2 and 3 remodels with major expansions, respectively, during portions of each fiscal year.

The number of stores open or acquired 52 weeks or less equaled 18, 18 and 15 at the end of fiscal years 2011, 2010 and 2009, respectively. The sales increase contributed by stores open or acquired within 52 weeks or less totaled approximately $222.0 million, $251.8 million and $234.8 million for fiscal years 2011, 2010 and 2009, respectively.

We believe our efforts around value and differentiation continue to be a significant contributor to our momentum. Our customers have shifted their buying toward branded and organic products, higher priced tiers, and to several discretionary categories. With the return of inflation, we are seeing our identical store sales breakout move toward our historical pattern of approximately 60% transaction count and 40% basket size. During fiscal year 2011, our transaction count in identical stores increased 5.7%, an acceleration from the 5.1% increase we experienced in fiscal year 2010. During fiscal year 2011, our basket size increased 2.4% compared to the 1.1% increase for fiscal year 2010, primarily driven by higher average prices per item as we selectively passed through some product cost increases and continued to see signs of customers trading up.

Gross profit totaled approximately $3.54 billion, $3.14 billion and $2.76 billion in fiscal years 2011, 2010 and 2009, respectively. Net LIFO inventory reserves increased approximately $10.3 million in fiscal year 2011, due primarily to inflation in product cost compared to a decrease in net LIFO inventory reserves of approximately $7.7 million and $5.6 million in fiscal years 2010 and 2009, respectively, due primarily to lower average inventory balances and net deflation in product costs. Despite the 19 basis point impact from the LIFO charge, the Company maintained healthy gross margins by balancing rising product costs while maintaining our relative value position. During fiscal years 2010 and 2009, the Company realized sequentially lower cost of goods sold by taking advantage of buying opportunities and improving our distribution, shrink control and inventory management.

General and administrative expenses totaled approximately $310.9 million, $272.4 million and $243.7 million in fiscal years 2011, 2010 and 2009, respectively. The increase in general and administrative expenses as a percentage of sales during fiscal year 2011 was primarily driven by higher wages, including wage costs associated with new strategic initiatives, totaling six basis points as a percentage of sales. General and administrative expenses for fiscal year 2010 include share-based payment costs related to restricted common stock grants of approximately $4.2 million. General and administrative expenses for fiscal years 2010 and 2009 include FTC-related legal costs totaling approximately $2.5 million and $14.7 million, respectively.

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