Profits at US natural and organic retailer Whole Foods Market have fallen during its fiscal first quarter, hit by costs linked to last year’s acquisition of rival Wild Oats Markets.
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Whole Foods booked net profit of US$39.1m for the three months to 20 January, down from $53.8m a year earlier.
Earnings per share fell from $0.38 a share to $0.28 a share, although Whole Foods said that once the impact of the Wild Oats deal was excluded, earnings were $0.36 a share.
Nevertheless, Whole Foods posted a 31.4% rise in sales, which reached $2.5bn. Comparable store sales were up 9.5%; excluding the Wild Oats business, comparable store sales were up 9.3%.
Chairman and CEO John Mackey also shrugged off concerns about a slowing US economy. “Historically, our sales have been highly resilient during economic downturns,” he said. “We are better positioned today than we ever have been from a value perspective.”
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By GlobalDataWild Oats, which Whole Foods acquired in last August, cost the retailer some $11.9m in net income. Mackey said the Whole Foods had been busy revamping the Wild Oats business.
“Wild Oats was a highly centralized company, and we have taken a cautious approach to unplugging the stores from the home office in Boulder,” he said. “As with many of our past mergers, we are making upfront investments to raise the stores up to our high standards, and these costs are in advance of what we expect to be a significant long-term improvement in sales.”
