Results failed to impress
Whole Foods Market (WFM) declared its 4Q15 and fiscal 2015 earnings on November 4, 2015, for the year ending September 27. The organic and natural food retailer reported disappointing results. It missed Wall Street analysts’ consensus estimates. The company reported GAAP (generally accepted accounting principles) adjusted profit per share of $0.16—compared to the market expectation of $0.34 for 4Q15. Adjusting for asset impairments and restructuring charges, the grocery chain reported EPS (earnings per share) of $0.30.
For the first time in five years, Whole Foods reported a fall in its same-store sales. The same-store sales fell by 0.2% during 4Q15. Although the company saw a 5.6% YoY (year-over-year) rise in its revenue during the quarter, a rise in SG&A (selling, general, and administrative) expenses led to a fall in the net profit by 56% compared to 4Q14. The net profit for 4Q15 stood at $56 billion. The EPS stood at $0.16. The company said that the results included $0.14 of charges related to asset impairments and restructuring. Whole Foods projected a profit of $0.34–$0.35 per share. The consensus for the EPS stood at $0.34.
Whole Foods’ shares fell during the last year. They’re at the lowest level since 2012. The company’s stock price has been under pressure due to increasing competition in the organic food space by traditional retailers like Costco (COST), Kroger (KR), and Walmart (WMT). The stock price fell by more than 1.6% on the day that the results were announced. The stock price fell by 2.1% the next day.
Together, Costco, Kroger, Walmart, and Whole Foods account for 12.2% of the portfolio holdings of the Consumer Staples Select Sector SPDR Fund ETF (XLP).
In this series, we’ll look at Whole Foods’ 4Q15 and full-year fiscal 2015 results. We’ll analyze the company’s results, look at its current position, and discuss management’s future plans and the outlook for fiscal 2016.