Whole Foods 4Q profit up, offers modest outlook

Associated Press

AUSTIN, Texas (AP) — Whole Foods Market Inc. said Wednesday that its fiscal fourth-quarter profit jumped nearly 50 percent on strong sales at its expanding base of natural and organic grocery stores.

The Austin, Texas-based company's net income increased to $112.7 million, or 60 cents per share, for the period that ended Sept. 30. That's up from $75.5 million, or 42 cents per share, a year ago. Revenue increased nearly 24 percent to $2.91 billion, with help from an extra week in the most recent quarter.

Analysts polled by FactSet expected 59 cents per share on revenue of $2.90 billion.

Whole Foods, which was hard hit during the recession, said that revenue from its stores open at least a year increased nearly 9 percent for the quarter. This is a closely watched indicator of a retailer's financial performance because it strips away the impact of recently opened or closed stores.

The grocery store operator opened seven stores in the fourth quarter and had 342 stores in the U.S., Canada and U.K. as of the end of the fiscal year. It has opened seven stores so far in the first quarter and plans to open another three stores during the current quarter.

Whole Foods said that Superstorm Sandy hurt its sales during the first five weeks of the quarter, particularly in the Northeast region. The company said it is working with its insurer to assess the damages, a process that could take several months.

It expects to record a one-time charge in the first quarter for estimated uninsured losses.

Whole Foods earned $465.6 million, or $2.52 cents per share, for its 53-week fiscal year. That compares with $342.6 million, or $1.93 per share, for its 2011 fiscal year. Annual revenue increased to $11.7 billion from $10.1 billion.

The company expects to earn $2.83 to $2.87 per share on fiscal 2013. Analysts forecast $2.91 per share. The forecast does not include the anticipated charge tied to Superstorm Sandy.

Whole Foods also said that its board declared a 43 percent increase in its quarterly dividend, from 14 cents per share to 20 cents per share. The dividend will be paid Jan. 29 to shareholders of record as of Jan. 18.

Despite the gains during the quarter, promises of growth and dividend payment, investors were spooked by the earnings forecast shortfall. The company has typically delivered strong results, and any sign of weakness was unsettling.

Whole Foods shares fell $1.86 to $94.07 in after-hours trading. The stock price has increased roughly 50 percent in the last year.

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