WFM Reports 8th Consecutive Same-Store Sales Drop in 3Q17

As we discussed previously, Whole Foods Market (WFM) reported fiscal 3Q17 results on July 26. The company didn’t host a conference call to discuss results.

The high-end grocer posted record sales of $3.7 billion, which was in line with the consensus expectations. Sales rose 0.6% YoY (year-over-year) as compared to 3Q16, primarily driven by six new store openings. As in the last eight quarters, sales comps continued to fall. Comps slipped another 1.9% after falling 2.4% and 2.8% in Q1 and Q2, respectively.

“For the quarter, we delivered record sales and free cash flow, and returned $44 million in dividends to our shareholders,” said John Mackey, co-founder and chief executive officer of Whole Foods Market. “Our comparable store sales improved sequentially on a one- and two-year basis in the third quarter, and that momentum has accelerated 220 basis points in the fourth quarter, resulting in positive overall comps for the first three weeks.”

Whole Foods’ earnings per share (or EPS) fell 2.7% YoY to 36 cents. This was the fifth straight quarter of EPS decline for the company. Earnings were, however, better than the Wall Street expectations of 33 cents per share.

While the management didn’t provide an earnings outlook, Wall Street expects WFM’s EPS to plunge 2.5% over the next 12 months (or NTM). Peers Kroger (KR) and Sprouts Farmers Market (SFM) are expected to perform better. Their NTM EPS could jump 1.4% and 7.9%, respectively.

ETF investors seeking to add exposure to Whole Foods can consider the First Trust Consumer Staples AlphaDEX Fund (FXG), which invests 4.7% of its portfolio in the company.