Whole Foods Markets (WFM)

[DewDiligence]

WFM reports (soft) FY3Q15 results and preliminary FY2016 outlook:

http://finance.yahoo.com/news/whole-foods-market-reports-third-200400028.html

Comparable store sales on a constant currency basis increased 1.3%, including an estimated 95 basis point negative impact from Easter shifting from the third quarter last year to the second quarter this year and from Team Member Appreciation Double Discount Day, which was held in the prior year only. [I.e., the true comp number for FY3Q15 was ~2.2%.]

…The Company recently signed eight new leases for four Whole Foods Market and four 365 by Whole Foods Market stores… The Whole Foods Market leases average 48,000 square feet and are located in Akron, OH; Exton, PA; Charleston, SC; and Kirkland, WA. The 365 by Whole Foods Market leases average 30,000 square feet and are located in Los Angeles and Santa Monica, CA; Portland, OR; Houston, TX; and Bellevue, WA. These 365 by Whole Foods Market leases reflect stores scheduled to open through 2017.

…For fiscal year 2015, the Company expects:

• Sales growth of approximately 9%

• Comparable store sales growth in the low single digits

• Square footage growth of 10% based on 38 new stores, including five relocations

• EBITDA margin of approximately 9%

• ROIC greater than 14%

For next fiscal year, the Company expects ending square footage growth of approximately 9%, or 7.5% growth on a weighted square footage basis reflecting the back-end loaded store opening schedule. The Company will provide other fiscal year 2016 targets next quarter.