Despite the Easter holiday shift, Whole Foods reported second-quarter revenue of $3.32 billion, a record increase of 10% from the prior-year quarter. But the record was not enough for Wall Street, which expected $3.34 billion.
The company’s earnings per share of 38 cents for the quarter also came in below expectations of 41 cents per share.
Comparable store sales, including the negative impact of approximately 50 basis points from Easter shifting from the second quarter last year to the third quarter this year, increased 4.5% on top of a 6.9% increase in the prior year. The spread between comparable store and identical store sales growth for the quarter due to five relocations and one expansion was approximately 50 basis points.
"The rapidly growing demand for fresh, healthy foods affirms our mission for the last 36 years and highlights the increasing growth opportunity ahead of us," said co-founder and co-CEO John Mackey. "Whole Foods Market is the premier brand in natural and organic foods, with unparalleled quality standards and the broadest selection. As we continue to innovate and evolve at a fast pace, we are confident in our ability to gain market share and expect our sales to approach $25 billion during the next five years."
Since the end of the first quarter, the company has added eight stores in six new markets. In the second quarter, the company opened three new stores. So far in the third quarter, the company has opened one new store and completed its acquisition of four New Frontiers Natural Marketplace stores in Flagstaff, Prescott and Sedona, Ariz.; and San Luis Obispo, Calif. The company expects to open seven additional stores in the third quarter and another 11 to 14 stores in the fourth quarter.
Whole Foods currently operates 379 stores totaling approximately 14.4 million sq. ft. and expects to cross the 500-store mark in 2017. Longer term, the company still sees demand for 1,200 Whole Foods Market stores in the United States.
The company has increased its development pipeline to a record 114 stores with the signing of nine new leases, including one relocation, totaling approximately 410,000 sq. ft. These leases include three new markets and are located in Fayetteville, Ariz.; Honolulu, Hawaii; Indianapolis, Ind.; Metuchen, N.J.; Chappaqua, N.Y.; Buffalo, N.Y.; Lower Gwynedd Township, Pa.; Fort Worth, Texas; and Richmond, Va.
Looking ahead, the company is revising its fiscal year 2014 outlook and now expects sales growth of approximately 11%, comparable store sales growth of 5% to 5.5% and diluted earnings per share of $1.52 to $1.56.
The company expects the Easter shift to positively impact comparable store sales growth in the third quarter by approximately 50 basis points.