Whole Foods expands 365 banner, Q4 results lead to dip in stock price
Whole Foods expands 365 banner, Q4 results lead to dip in stock price
Whole Foods Market’s fourth quarter results showed total sales increased 6 percent to a record $3.4 billion, but comparable store sales decreased 0.2 percent, leading to a drop in stock prices Thursday morning — though the stock regained roughly half of the loss by noon. In its Q4 report the company also announced that it has signed leases for three new 365 by Whole Foods Market stores.
“We’re excited to have eight leases signed for our new store concept,” Jeff Turnas, president of 365 by Whole Foods Market, said in a press release. “We continue to look for strong markets and locations where we can appeal to new customers seeking a fresh, healthy and convenient food experience.”
In July, Whole Foods Market announced leases for 365 by Whole Foods Market stores in five cities. The first three store locations are slated to open in 2016, and up to 10 stores are expected to open in 2017.
The company, which currently operates 433 stores and has 111 in development, also announced four new leases for Whole Foods Market stores, though two will be relocations.
“There has never been a time where customers have had more interest in what they eat, where it comes from and who's growing it,” Walter Robb, co-CEO of Whole Foods Market, said in a release. “Our company mission, commitment to transparency, and culture of innovation are more relevant than ever, and we see tremendous growth potential as food consciousness continues to evolve.”
“In the face of increasing competition, we are not standing still,” John Mackey, co-founder and co-chief executive officer of Whole Foods Market, said in a press release. “We have made measurable progress on many of our strategic initiatives over the past year, while producing industry-leading sales per gross square foot of $970, a record $1.1 billion in cash flow from operations, and healthy returns on invested capital.”
The company announced a new capital allocation strategy that it says reflects confidence in its future growth and cash flow generation. As part of this strategy, the board of directors authorized a new $1 billion share repurchase program. In addition, Whole Foods recently entered into a $500 million five-year revolving credit facility and announced its intent to incur additional long-term debt of up to $1 billion prior to the end of the first quarter.
