Same-store sales continue to decelerate at Whole Foods as the nation’s leading natural and organic grocer continues to face traffic and ticket pressures caused by upstart rivals and established competitors.
Whole Foods sales in the second quarter ended July 6 increased 10% to nearly $3.4 billion from $3 billion the prior year while same store sales increased 3.9%, including a 60 basis positive impact related to the timing of Easter. Profits during the quarter increased 6.3% to $151 million, 41 cents a share, compared to prior year profits of $142 million, or 38 cents a share.
"Our business model is producing industry-leading sales per gross square foot, healthy returns on invested capital and strong operating cash flow," said Walter Robb, co-CEO of Whole Foods Market. "We are seeing signs of stability in our sales trends and believe our strategic initiatives will help generate further momentum and produce increasing returns on invested capital over the long term."
The company noted its store generate average weekly sales of more than $736,000, or more than $1,000 per sq. ft. Despite the high level of productivity, increased competition and reduced pricing at Whole Foods has put pressure on the company’s margins and top line growth.
Both factors were evident earlier this year when the company reported second quarter results on May 6 and lowered its full year expectations for sales and profit growth. The diminished view caused shares, which had been trading above $50 for most of the year at that time, to decline sharply. The release of third quarter results and affirmation of the company’s previously lowered outlook only served to send shares lower when the company reported results after the market closed on Wednesday.