Sales Increase 31%; Comparable Store Sales Increase 9.3%; Company Reports Net income of $39.1 Million, Including an Estimated $11.9 Million in Dilution from Wild Oats, and Diluted EPS of $0.28; Company Reaffirms Comp Sales Growth Guidance of 7.5% to 9.5% for Fiscal Year 2008
AUSTIN, Texas, Feb. 19 /PRNewswire-FirstCall/ -- Whole Foods Market, Inc. (NASDAQ:WFMI) today reported results for the 16-week first quarter ended January 20, 2008. Sales increased 31.4% to approximately $2.5 billion. Comparable store sales increased 9.3% on top of a 7.0% increase in the prior year. Identical store sales, excluding five relocated stores and three major expansions, increased 7.1% on top of a 6.2% increase in the prior year.
Store contribution was approximately $182.2 million, and G&A expenses totaled approximately $87.4 million. Pre-opening and relocation costs were approximately $20.2 million, and interest expense, net of investment and other income, was approximately $8.8 million. Net income was approximately $39.1 million, and diluted earnings per share were $0.28. The Company estimates the negative impact on net income from Wild Oats was approximately $11.9 million, or $0.08 per diluted share, in the quarter. Earnings before interest, taxes and non-cash expenses were approximately $167.5 million, or $1.19 per diluted share, compared to approximately $147.9 million, or $1.03 per diluted share, in the prior year.
"We realize there are a lot of questions out there about how a slowing economy might impact our sales. Historically, our sales have been highly resilient during economic downturns. We attribute our strong sales to many factors, including our loyal core customers and their dedication to a natural and organic lifestyle, our high percentage of perishable product sales, and our extensive selection of high-quality prepared foods that attracts customers trading down from restaurants," said John Mackey, chairman, chief executive officer, and co-founder of Whole Foods Market. "In addition, we sell a high percentage of relatively small-ticket items, and we are better positioned today than we ever have been from a value perspective. Given our prior experience, strong year-to-date comps, easier year-over-year comparisons, and the increased number of new stores entering the comp base, we are confident in reaffirming our comp guidance of 7.5% to 9.5% for the fiscal year." The Company produced approximately $70 million in cash flow from operations and received approximately $7 million in proceeds from the exercise of stock options. Capital expenditures were approximately $162 million of which $102 million related to new stores and approximately $6 million related to Wild Oats. In addition, the Company paid approximately $25 million in cash dividends to shareholders. At the end of the quarter, the Company had total debt of approximately $773 million, including $30 million drawn on its $250 million credit line. Currently, the Company has $50 million drawn on its line, leaving approximately $114 million available net of outstanding letters of credit. In addition, the credit agreement contains an accordion feature under which the Company can increase its credit line up to $350 million.
Results Excluding the Impact of Wild Oats The following information related to the quarter excludes the estimated impact of acquired operations.
The following table shows the Company's growth in sales, comparable store sales, and ending square footage for the quarter compared to its historical five-year ranges and averages. For fiscal year 2008, the Company has guided to sales growth, excluding Wild Oats, of 15% to 20% and comparable store sales growth of 7.5% to 9.5%.
The table also shows the Company's first quarter results for certain line items as a percentage of sales compared to its historical five-year ranges and averages, and the percentage of sales from identical as well as new and relocated stores for the first quarter compared to its historical five-year ranges and averages. The Company believes this is relevant information as new and relocated stores tend to have lower gross profit and higher direct store expenses as a percentage of sales, resulting in a lower store contribution than identical stores. Where applicable, historical percentages have been adjusted to exclude Hurricane Katrina charges and credits, as well as share-based payments expense incurred in fiscal year 2005 related to the Company's September 2005 accelerated vesting of stock options.
FY03-FY07 Range FY03-FY07
Low High Average 1Q08 Sales growth 13.2% 22.8% 18.8% 18.6%
Comparable store
sales growth 7.1% 14.9% 10.9% 9.3%
Two-year comps
(sum of two years) 18.1% 27.8% 22.3% 16.3%
Ending square footage
growth 10% 18% 13% 19% Gross profit 34.2% 35.1% 34.8% 34.1%
Direct store expenses 25.2% 26.0% 25.6% 26.2%
Store contribution 8.9% 9.6% 9.3% 8.0%
G&A 3.1% 3.2% 3.2% 3.4% Percent of sales from
identical stores 89% 91% 90% 87%
Percent of sales from
new & relocated stores 7% 9% 8% 11% Gross profit consists of sales less cost of goods sold and occupancy costs plus the contribution from non-retail distribution and food preparation operations. Due to seasonality, the Company's gross margin is typically lower in the first quarter than in the remaining three quarters of the year, averaging 34.4% for the past five years. For the first quarter, gross profit decreased 10 basis points to 34.1% of sales due primarily to an increase in the percentage of sales from new and relocated stores to 11% from 7% in the prior year. The LIFO charge was approximately $2.6 million versus a $1.0 million charge in the prior year, a negative impact of seven basis points. For stores in the identical store base, gross profit improved 42 basis points to 34.7% of sales.
Direct store expenses increased 36 basis points to 26.2% of sales, also due primarily to the increase in the percentage of sales from new and relocated stores. Share-based payments expense included in direct store expenses was approximately $1.7 million compared to approximately $2.6 million in the prior year. For stores in the identical store base, direct store expenses improved 45 basis points to 25.4% of sales.
Store contribution decreased 46 basis points to 8.0% of sales from 8.4% of sales last year. For stores in the identical store base, store contribution improved 88 basis points to 9.3% of sales.
G&A expenses increased 41 basis points to 3.4% of sales primarily due to an increase in legal and professional fees, along with an increase in wages at the regional and global offices. Share-based payments expense included in G&A was approximately $1.3 million compared to approximately $2.0 million in the prior year.
Additional information on the quarter for comparable stores, identical stores and all stores is provided in the following table.
NOPAT # of Average Total
Comparable Stores Comps ROIC Stores Size Square Feet Over 11 years old 5.4% 78% 64 28,300 1,811,500
Between eight and
11 years old 4.0% 55% 28 33,400 936,000
Between five and
eight years old 8.3% 41% 41 33,900 1,390,200
Between two and
five years old 11.7% 22% 41 44,600 1,827,000
Less than two
years old (includes
five relocations) 37.7% -2% 15 58,100 872,100 All comparable stores
(7.6 years old,
s.f. weighted) 9.3% 34% 189 36,200 6,836,700
All identical stores
(7.9 years old,
s.f. weighted) 7.1% 38% 184 35,400 6,509,800
All stores excluding
Wild Oats (6.7 years old,
s.f. weighted) 26% 208 37,800 7,858,400 Excluding the estimated impact of the Wild Oats acquisition as discussed in the following section, adjusted net income was $51.0 million, and adjusted diluted earnings per share were $0.36.
Estimated Impact of Wild Oats for the Quarter and Fiscal Year Sales at Wild Oats were $238.8 million in the first quarter, or 9.7% of total sales. The Company closed 12 Wild Oats stores during the quarter, including one that will re-open in May after a major renovation, ending the quarter with 62 stores. Sales for the 62 continuing stores were $227.9 million, and identical store sales growth was 8.6%. As highlighted in the following table, the Company estimates the negative impact on net income from Wild Oats was approximately $11.9 million, or $0.08 per diluted share, in the quarter. This estimate excludes unquantifiable synergies and costs.
Dilutive Impact of
Wild Oats (16 Weeks) (In millions, except per share amount)
Store contribution/(loss) from continuing locations $7.9 (1)
Store contribution/(loss) from closed locations (2.8)(2)
Accretion of store closure reserve, and other store
closure costs (2.4)(3)
G&A expenses - Wild Oats home office (including severance) (9.9)(4)
G&A expenses - amortization of acquired intangibles (1.9)(5)
Interest expense related to term loan, net of $0.5 million
of investment income (10.8)(6)
Total pre-tax impact $(20.0)
Total after-tax impact (11.9)
Impact per diluted share $(0.08) (1) This reflects a store contribution of 3.5% of sales, which the Company
expects to improve sequentially in the remaining quarters of the
fiscal year. (2) The Company closed 12 stores during the first quarter. The Company
expects to close up to three additional Wild Oats stores in connection
with nearby Whole Foods Market store openings in the second half of
fiscal year 2008, with two additional closures occurring in each of
fiscal years 2009 and 2010. (3) This will be an ongoing expense through fiscal year 2008 and beyond. (4) At the end of the first quarter, 87 Wild Oats team members were still
employed at the Boulder home office. Currently, there are 56. The
Company expects these G&A expenses to decline substantially throughout
the second and third quarters and be substantially eliminated by the
end of the fiscal year. (5) This will be an ongoing expense through the end of fiscal year 2008. (6) Interest expense will be ongoing through fiscal year 2008 and beyond. The Company expects zero investment income for the remainder of the
year. "Wild Oats was a highly centralized company, and we have taken a cautious approach to 'unplugging' the stores from the home office in Boulder," said Mr. Mackey. "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. We are pleased by the trends we are seeing and expect to see continuous improvement as we move further along in our integration process." Growth and Development In the first quarter, the Company opened six new stores in Chandler, AZ; Napa, CA; Pasadena, CA; Cranston, RI; Nashville, TN; and Sugar Land, TX. The Company also closed 12 acquired stores, one of which will re-open in May after a major renovation, ending the quarter with 270 stores totaling 9.4 million square feet.
The Company has recently signed six new store leases averaging 50,500 square feet in size in Dublin, CA (a replacement site); Folsom, CA; San Fernando Valley, CA; Lake Grove, NY; Franklin, TN; and Fort Worth, TX.
The following table provides additional information about the Company's store openings last fiscal year and thus far in fiscal year 2008, leases currently tendered but not opened, and total development pipeline for stores scheduled to open through fiscal year 2011. For accounting purposes, a store is considered tendered on the date the Company takes possession of the space for construction and other purposes, which is typically when the shell of the store is complete or nearing completion. The average tender period, or length of time between tender date and opening date, will vary depending on several factors, one of which is the number of acquired leases, ground leases and owned properties in development, all of which generally have longer tender periods than standard operating leases.
Stores Stores Current Current
Opened Opened Leases Leases
New Store Information FY07 FY08 YTD Tendered Signed(1) Number of stores
(including relocations) 21 6 26 89
Number of relocations 5 2 6 22
Number of lease acquisitions,
ground leases and owned
properties 4 3 8 12
New markets 3 0 4 15
Average store size
(gross square feet) 56,500 55,900 46,000 51,500
As a percentage of
existing store average size 167% 161% 133% 149%
Total square footage 1,185,800 335,600 1,197,200 4,625,900
As a percentage of
existing square footage 13% 4% 13% 49%
Average tender period
in months 8.8 10.3
Average pre-opening
expense per store
(incl. rent) $2.6 mil(2)
Average pre-opening
rent per store $0.9 mil(2)
Average development
cost (excl. pre-opening) $15.1 mil(2)
Average development
cost per square foot $278(2)
(1) Includes leases tendered
(2) Pre-opening and development costs exclude Kensington in London,
England. Development costs include estimated costs for projects not
yet final; excluding owned properties and lease acquisitions, the
average development cost for stores that opened in fiscal year 2007
was $14.4 million, or $261 per square foot, compared to $13.0 million,
or $258 per square foot, for stores that opened in fiscal year 2006. Growth Goals for Fiscal Year 2008 and Beyond
The Company is reaffirming its previously announced guidance for fiscal year 2008. On a 52-week to 52-week basis, the Company expects total sales growth of 25% to 30% and comparable store sales growth of 7.5% to 9.5%. Excluding Wild Oats, the Company expects sales growth of 15% to 20%. For the first four weeks ended February 17, 2008 of the second quarter, comparable store sales growth was 8.9% on top of a 4.7% increase in the prior year, and identical store sales growth was 6.9% on top of a 4.1% increase in the prior year. Sales at the 62 continuing Wild Oats stores increased 6.2% on top of a 0.1% decrease in the prior year. Acquired stores will enter the comparable store sales base in the fifty-third full week following the date of the merger.
The Company has opened six stores year to date. Of the Company's 26 currently tendered stores representing approximately 1.2 million square feet, two stores are expected to open in the second quarter and up to 13 stores are expected to open in the second half of the fiscal year.
The Company does not expect to produce operating leverage in fiscal year 2008 due primarily to a decrease in store contribution as a percentage of sales driven by a higher percentage of sales from new and acquired stores, which have a lower contribution than existing stores; investments in labor and benefits at the acquired Wild Oats stores; and continued, though more moderate, increases in health care costs as a percentage of sales. In addition, the Company expects G&A as a percentage of sales to be in line with the 3.3% reported in fiscal year 2007 due mainly to the temporary costs associated with integrating the Wild Oats acquisition, along with the cost of fully staffing the Company's three smallest regions which gained the greatest number of stores in the merger as a percentage of their existing store base, and an increase in legal and professional fees. The Company expects G&A as a percentage of sales to improve sequentially from the first half to the second half of the year.
The Company expects total pre-opening and relocation costs for fiscal year 2008 to be in the range of $80 million to $90 million. Approximately $40 million to $45 million relates to stores expected to open in fiscal year 2008. These ranges are based on estimated tender dates which are subject to change. The Company expects average pre-opening and relocation expense for stores opening in fiscal year 2008 to be in line with the average for stores that opened in fiscal year 2007, excluding the Kensington store in London. On an average weekly basis, the Company expects quarterly pre-opening and relocation expense to ramp up throughout each quarter of the year.
The Company expects interest expense, net of investment and other income, in the range of $35 million to $40 million in fiscal year 2008.
The Company expects share-based payments expense of approximately $2 million to $3 million per quarter in the first half of the year and $4 million to $5 million per quarter in the second half of the year following the Company's annual grant date early in the third quarter, when the majority of options are granted.
The Company has entered into a support agreement to provide certain products and services for the divested Henry's and Sun Harvest stores for up to two years. The Company anticipates the revenue associated with this agreement will be approximately equal to its incremental cost of providing the support.
Capital expenditures for the fiscal year are expected to be in the range of $575 million to $625 million. Of this amount, approximately 65% to 70% relates to new stores opening in fiscal year 2008 and beyond, and approximately 7% to 8% relates to remodels of acquired Wild Oats stores.
The Company currently operates 270 stores totaling 9.4 million square feet and has 89 stores in development totaling 4.6 million square feet. Longer term, the Company's goal is to reach $12 billion in sales in fiscal year 2010.
About Whole Foods Market Founded in 1980 in Austin, Texas, Whole Foods Market (http://www.wholefoodsmarket.com/) is the world's leading natural and organic foods supermarket and America's first national certified organic grocer. In fiscal year 2007, the Company had sales of $6.6 billion and currently has 270 stores in the United States, Canada, and the United Kingdom. Whole Foods Market employs more than 50,000 Team Members and has been ranked for eleven consecutive years as one of the "100 Best Companies to Work For" in America by FORTUNE magazine.
Forward-looking statements The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties, which could cause our actual results to differ materially from those described in the forward-looking statements. These risks include but are not limited to general business conditions, the successful integration of acquired businesses into our operations, the timely development and opening of new stores, the impact of competition, and other risks detailed from time to time in the SEC reports of Whole Foods Market, including Whole Foods Market's report on Form 10-K for the fiscal year ended September 30, 2007. Whole Foods Market undertakes no obligation to update forward-looking statements.
The Company will host a conference call today to discuss this earnings announcement at 4:00 p.m. CT. The dial-in number is 1-800-862-9098, and the conference ID is "Whole Foods." A simultaneous audio webcast will be available at http://www.wholefoodsmarket.com/.
Whole Foods Market, Inc. Consolidated Statements of Operations (unaudited)
(In thousands, except per share amounts)
Sixteen weeks ended
January 20, January 14,
2008 2007
Sales $2,457,258 $1,870,731
Cost of goods sold and occupancy costs 1,630,706 1,229,972
Gross profit 826,552 640,759
Direct store expenses 644,375 482,797
Store contribution 182,177 157,962
General and administrative expenses 87,412 56,132
Operating income before pre-opening
and relocation 94,765 101,830
Pre-opening expenses 15,194 13,255
Relocation costs 4,957 3,029
Operating income 74,614 85,546
Interest expense (11,581) (7)
Investment and other income 2,754 4,052
Income before income taxes 65,787 89,591
Provision for income taxes 26,644 35,836
Net income $39,143 $53,755 Basic earnings per share $0.28 $0.38
Weighted average shares outstanding 139,377 140,267 Diluted earnings per share $0.28 $0.38
Weighted average shares
outstanding, diluted basis 140,610 142,918 Dividends per share $0.20 $0.33
A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations follows (in thousands): Sixteen weeks ended
January 20, January 14,
2008 2007
Net income (numerator for basic
earnings per share) $39,143 $53,755
Interest on 5% zero coupon convertible
subordinated debentures, net of income taxes 24 40
Adjusted net income (numerator for
diluted earnings per share) $39,167 $53,795
Weighted average common shares
outstanding(denominator for basic earnings
per share) 139,377 140,267
Potential common shares outstanding:
Assumed conversion of 5% zero
coupon convertible subordinated debentures 92 160
Assumed exercise of stock options 1,141 2,491
Weighted average common shares outstanding and
potential additional common shares outstanding
(denominator for diluted earnings per share) 140,610 142,918 Basic earnings per share $0.28 $0.38
Diluted earnings per share $0.28 $0.38 Whole Foods Market, Inc. Consolidated Balance Sheets (unaudited)
January 20, 2008 and September 30, 2007
(In thousands) Assets
2008 2007
Current assets:
Cash and cash equivalents $43,871 $-
Restricted cash 2,341 2,310
Accounts receivable 114,342 105,209
Proceeds receivable for divestiture - 165,054
Merchandise inventories 315,103 288,112
Prepaid expenses and other current assets 47,321 40,402
Deferred income taxes 70,648 66,899
Total current assets 593,626 667,986
Property and equipment, net of accumulated
depreciation and amortization 1,728,556 1,666,559
Goodwill 668,853 668,850
Intangible assets, net of accumulated
amortization 94,481 97,683
Deferred income taxes 117,525 104,877
Other assets 6,943 7,173
Total assets $3,209,984 $3,213,128 Liabilities And Shareholders' Equity
2008 2007
Current liabilities:
Current installments of long-term
debt and capital lease obligations $2,962 $24,781
Accounts payable 198,383 225,728
Accrued payroll, bonus and other
benefits due team members 202,088 181,290
Dividends payable 27,901 25,060
Other current liabilities 301,929 327,657
Total current liabilities 733,263 784,516
Long-term debt and capital lease
obligations, less current installments 769,587 736,087
Deferred lease liabilities 170,914 152,552
Other long-term liabilities 74,404 81,169
Total liabilities 1,748,168 1,754,324
Shareholders' equity:
Common stock, no par value, 300,000
shares authorized; 139,512 and 143,787
shares issued; 139,511 and 139,240
shares outstanding in 2008 and 2007,
respectively 1,043,367 1,232,845
Common stock in treasury, at cost - (199,961)
Accumulated other comprehensive income (1,690) 15,722
Retained earnings 420,139 410,198
Total shareholders' equity 1,461,816 1,458,804
Commitments and contingencies
Total liabilities and shareholders'
equity $3,209,984 $3,213,128 Whole Foods Market, Inc. Consolidated Statements of Cash Flows (unaudited)
January 20, 2008 and January 14, 2007
(In thousands)
Sixteen weeks ended
January 20, January 14,
2008 2007
Cash flows from operating activities
Net Income $39,143 $53,755
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 74,482 52,731
Loss on disposition of assets 642 1,030
Share-based payments expense 3,030 4,773
Deferred income tax benefit (11,125) (6,561)
Excess tax benefit related to
exercise of employee stock options (1,613) (5,286)
Deferred lease liabilities 17,600 4,735
Other (4,016) 506
Net change in current assets and
liabilities:
Accounts receivable (10,062) 4,457
Merchandise inventories (29,623) (37,216)
Prepaid expense and other current
assets (11,848) (10,454)
Accounts payable (27,653) 18,490
Accrued payroll, bonus and other
benefits due team members 20,108 6,862
Other current liabilities 11,172 24,607
Net cash provided by operating activities 70,237 112,429
Cash flows from investing activities
Development costs of new store
locations (102,040) (100,942)
Other property and equipment expenditures (59,641) (52,083)
Proceeds from hurricane insurance 1,500 -
Acquisition of intangible assets (874) (6,246)
Purchase of available-for-sale securities (194,316) (145,268)
Sale of available-for-sale securities 194,316 234,777
Increase in restricted cash (31) (14,420)
Payment for purchase of acquired
entities, net of cash (4,913) -
Proceeds from divestiture, net 165,142 -
Net cash used in investing activities (857) (84,182)
Cash flows from financing activities
Dividends paid (25,074) (20,971)
Issuance of common stock 6,967 28,806
Excess tax benefit related to
exercise of employee stock options 1,613 5,286
Proceeds from long-term borrowings 30,000 -
Payments on long-term debt and
capital lease obligations (39,015) (35)
Net cash provided by (used in)
financing activities (25,509) 13,086
Net change in cash and cash equivalents 43,871 41,333
Cash and cash equivalents at
beginning of period - 2,252
Cash and cash equivalents at end of period $43,871 $43,585 Supplemental disclosure of cash flow
information:
Interest paid $11,270 $124
Federal and state income taxes paid $27,171 $22,294
Non-cash transactions:
Conversion of convertible debentures
into common stock $154 $5,686 Whole Foods Market, Inc. Non-GAAP Financial Measures (unaudited)
(In thousands, except per share amounts) In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides information regarding Economic Value Added ("EVA"), Earnings before interest, taxes and non-cash expenses ("EBITANCE"), and consolidated results excluding the impact of the Wild Oats acquisition on adjusted diluted earnings per share in the press release as additional information about its operating results. These measures are not in accordance with, or an alternative to, GAAP. The Company's management believes that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. Management believes EBITANCE is a useful non-GAAP measure of financial performance, helping investors more meaningfully evaluate the Company's cash flow results by adjusting for certain non-cash expenses. These expenses include depreciation, amortization, non-cash share-based payments expense, deferred rent, and LIFO. Similar to non-GAAP EBITDA, or earnings before interest, taxes, depreciation and amortization, this measure goes further by including other non-cash expenses, primarily those which have arisen since the use of EBITDA became common practice and because of accounting changes due to recent accounting pronouncements. Management uses EBITANCE as a supplement to cash flows from operations to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital. In addition, management uses these measures for reviewing the financial results of the Company and EVA for incentive compensation and capital planning purposes.
The following is a tabular reconciliation of the EVA non-GAAP financial measure to GAAP net income, which the Company believes to be the most directly comparable GAAP financial measure.
Sixteen weeks ended
January 20, January 14,
EVA 2008 2007
Net income $39,143 $53,755
Provision for income taxes 26,644 35,836
Interest expense and other 17,026 7,730
NOPBT 82,813 97,321
Income taxes (40%) 33,125 38,928
NOPAT 49,688 58,393
Capital charge 68,813 48,242
EVA $(19,125) $10,151
The following is a tabular presentation of the non-GAAP financial measure, EBITANCE including a reconciliation to GAAP net income, which the Company believes to be the most directly comparable GAAP financial measure.
Sixteen weeks ended
January 20, January 14,
EBITANCE 2008 2007
Net income $39,143 $53,755
Provision for income taxes 26,644 35,836
Interest expense, net 8,827 (4,045)
Income from operations 74,614 85,546
Non-cash expenses:
Share-based payments expense 3,030 4,773
Depreciation and amortization 74,482 52,731
LIFO expense 2,632 1,000
Deferred rent 12,760 3,867
Total non-cash expenses 92,904 62,371
Earnings before interest, taxes, and
non-cash expenses 167,518 147,917
Weighted average shares outstanding,
diluted basis 140,610 142,918
EBITANCE per share $1.19 $1.03 Whole Foods Market, Inc. Non-GAAP Financial Measures (unaudited)
(In thousands, except per share amounts) The following is a tabular presentation of the impact of Wild Oats operations, included in GAAP net income, and a reconciliation of the numerator of the adjusted diluted earnings per share non-GAAP financial measure to GAAP net income, which the Company believes to be the most directly comparable GAAP financial measure.
Sixteen weeks ended
January 20,
Dilutive Impact of Wild Oats 2008
Adjustments to exclude impact of Wild Oats
Store contribution/(loss) from continuing locations $7,867
Store contribution/(loss) from closed locations (2,822)
Accretion of store closing reserve (2,414)
General and administrative expenses, Wild Oats
home office (9,938)
Interest expense related to the term loan agreement,
net (10,813)
Amortization expense related to acquired intangibles (1,882)
Total adjustments (20,002)
Income taxes (40.5%) (8,101)
Total adjustments, net of tax (11,901)
Weighted average shares outstanding, diluted basis 140,610
Impact per share $(0.08) Net income $39,143
Less: Adjustments to exclude impact of Wild Oats, net
of tax (11,901)
Adjusted net income 51,044
Weighted average shares outstanding, diluted basis 140,610
Earnings per share, adjusted $0.36 Contact: Cindy McCann
VP of Investor Relations
512.542.0204
DATASOURCE: Whole Foods Market, Inc.
CONTACT: Cindy McCann, VP of Investor Relations of Whole Foods Market, Inc., +1-512-542-0204 Web site: http://www.wholefoodsmarket.com/
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