Whole Foods profit drops 30%
Whole Foods Market Inc. said its fiscal third-quarter net income fell more than 30% largely because of costs associated with its acquisition of Wild Oats and a tough economy that hurt consumer spending.
Its shares sank in after-hours trading as the Austin, Texas, company also lowered its outlook for 2009, suspended its dividend and said it would open fewer stores next year.
The natural foods grocer earned $33.9 million, or 24 cents a share, down from $49.1 million, or 35 cents, in the same quarter last year. It estimates that the purchase of Wild Oats was responsible for a reduction of $4.9 million, or 3 cents a share, in net income.
Whole Foods reported revenue of $1.84 billion for the quarter, up from $1.51 billion in the previous year.
The results fell short of Wall Street estimates. Analysts polled by Thomson Financial expected profit of 31 cents a share on revenue of $1.9 billion.
Whole Foods also sharply cut its outlook for 2009, saying it expected sales growth of 6% to 10% for the year rather than the previously stated 25% to 30%. Its comparable-store sales are expected to grow 1% to 5%, down from 7.5% to 9.5%.
Whole Foods also said it was taking some cost-cutting steps as part of a more “conservative approach,” such as reducing the number of stores it plans to open in 2009 and suspending its quarterly dividend.
Shares in Whole Foods, which had risen nearly 7% during regular trading ahead of the results, fell almost 14% to $19.77 in after-hours trading.