WFM registered a 1.3% top line increase in 3Q16 despite weak sales comps
Whole Foods Market (WFM) reported its results for fiscal 3Q16 on July 27, 2016. The company reported a 1.9% year-over-year (or YoY) increase in its top line, primarily driven by new store openings. The company added 12 new stores during the quarter, including its first “365 by Whole Foods Market” store.
Comparable store sales were down 2.6% during the quarter. However, on a sequential basis, the sales comps showed some improvement from the previous quarter’s decline of 3%. This was WFM’s third consecutive quarter of negative sales comps.
What was behind the slow comps growth in 3Q16?
The decline in WFM’s same-store sales was a result of a 2.7% decline in the number of transactions, which offset the 0.1% improvement in the average basket size during the quarter. Whole Foods Market’s supermarket peers Kroger (KR) and Sprouts Farmer’s Market (SFM), on the other hand, reported same-store sales growths of 2.4% and 4.8%, respectively, in their last reported quarters. Mass merchandisers Costco (COST) and Walmart (WMT) also reported better sales comps than WFM. While Costco grew its comps by 3%, Walmart’s comps grew at a slower pace of 0.8%.
Management’s comments on WFM’s 3Q16 performance
“We delivered record sales of $3.7 billion this quarter along with a sequential improvement in our comparable store sales trends,” said Walter Robb, co-CEO of Whole Foods Market. He further added, “We are continuing to make measurable progress on fundamentally evolving our business including the successful launch of our new 365 format, expanded value investments, and increased efforts to better understand and provide personalized offers to our customers. We are seeing some encouraging signs in terms of our sales and believe our nine-point plan will produce strong returns for our shareholders over the long term.”
Read on to learn about Whole Foods Market’s margins and profitability in 3Q16.