Whole Foods Market (WFM, Financial) recently exceeded the 400-store mark and estimates to reach 500 stores during fiscal year 2017, and forecast the long-term demand for 1,200 Whole Foods Market stores in the United States. The new store launches during the quarter coupled with creating unique promotional methodologies are believed to strategically position the grocery store chain in leading the competition.
New stores are growth drivers
Whole Foods opened nearly 38 new stores in the year, covering over 15 million square feet for 399 stores in 42 states and three countries. The solid operation of its key stores resulted in fifth successive year of optimization in direct store costs and its third successive year of impressive double-digit store contribution margin. Whole Foods delivered a robust 15% return on invested capital and returned $750 million to its shareholder through stock repurchases and dividends, and concluded the year with nearly $1 billion in free cash and investments.
Whole Foods is keenly committed on offering better, fresh and innovative choices and amenities to its customers, being the first nationwide superstore to accept Apple Pay.
The food major has introduced a unique Responsibly Grown rating system for its produce and floral stores. The rating system is believed to protect its customers against the potential health hazards and thus attract several other new customers.
Whole Foods sharp focus on exciting its customers with new and innovative product launches while maintaining superior quality of its offerings is expected to significantly expand its customer base.
Whole Foods introduced a unique national brand campaign, targeted on communicating a Values Matter idea for illustrating its core intention and strengthening its exclusive position as the Healthiest Grocery Store of America.
Every week, more than 7 million customers visit its stores, with 1.7 million leveraging its online newsletter and 9 million linked to it through social media.
The significant new customer footfall at Whole Foods stores coupled with the store count expansion is estimated to multiply the Whole Foods growth opportunities.
Conclusion
Overall, the investors are advised to invest into Whole Foods Market, Inc. looking at the impressive valuations levels with the trailing P/E and forward P/E ratios of 34.52 and 27.75 respectively. The PEG ratio of 2.45 is also comparable to the industry’s average of 1.74 and suggests healthy company growth. The profit margin of 4.08% depicts satisfactory company profit. The Whole Foods growth story is further supported by a robust balance sheet with total cash of $743.00 million and total debt of only $62.00 million, allowing it for an accelerated business expansion.
