Whole Foods Mid-Year Check-In

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Whole Foods Mid-Year Check-In

  1. 1. Whole Foods at Mid-Year 3 Things You Need to Know
  2. 2. 1) Earnings Disappointments Wall Street has not reacted kindly to Whole Foods’ earnings reports
  3. 3. 1) Earnings Disappointments • After years of same-store-sales growth above 6%, Whole Foods reported that the metric fell to 5.9% during the fourth quarter of 2013, and 4.5% at the beginning of this year. • Additionally, earnings came in below analyst expectations for both quarters. • Management made clear that competition was being felt in slower sales, and that the company would be lowering prices to compete on costs with others entering the organic field.
  4. 4. 2) Ramping Up Store Openings
  5. 5. 2) Ramping Up Store Openings • Earlier this year, co-CEOs Walter Robb and John Mackey announced that they believed the U.S. could support 1,200 Whole Foods locations, up 20% from previous estimates. Currently, there are 374 locations. • During the first quarter earnings release, management laid out the blueprint for further expansion. – In 2014, open 37 locations, bringing count to 398. – In 2015, open 42 locations, bringing count to 436. – In 2016, open 46 locations, bringing count to 478. – In 2017, open 50 locations, bringing count to 524. – In 2018, open 55 locations, bringing count to 575.
  6. 6. 3) What to Watch Can management deliver on growth and same- store-sales estimates?
  7. 7. 3) What to Watch Store Build-Out • Whole Foods has its work cut out to meet these lofty goals. • When the company reports earnings, check to make sure it still believes there will be 398 locations by the end of fiscal 2014. Same-Store Sales • In order to meet expectations, Whole Foods needs to show growth in this metric of roughly 5.4%. • Anything above 5.5% would be a huge positive.
  8. 8. Having the prescience to foresee the organic movement could have made you a fortune. What’s the next big movement? The “Internet of Things.” To see one small company set to capitalize on the “Internet of Things,” check out our special free report:
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