Whole Foods Market Earnings: Three Straight Quarters of Profit Growth

S&P 500 (NYSE:SPY) component Whole Foods Market, Inc. (NASDAQ:WFMI) reported net income above Wall Street’s expectations for the second quarter. Whole Foods Market, Inc. owns and operates the chain of natural and organic foods supermarkets. Its products include seafood, grocery, meat and poultry, bakery and prepared foods.

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Whole Foods Market Earnings Cheat Sheet for the Second Quarter

Results: Net income for Whole Foods Market, Inc. rose to $89.9 million (51 cents/share) vs. $67.5 million (39 cents/share) in the same quarter a year earlier. A rise of 33.3% from the year earlier quarter.

Revenue: Rose 11.6% to $2.35 billion YoY.

Actual vs. Wall St. Expectations: WFMI beat the mean analyst estimate of 46 cents/share. Estimates ranged from 40 cents per share to 51 cents per share.

Quoting Management: “These are the strongest overall results we have reported in the past five years. Our solid execution is generating consistent cash flow, and with our long-term debt now fully repaid, we are considering other uses for our growing cash balance, including accelerating our growth, raising our dividend and repurchasing stock,” said John Mackey co-founder and co-chief executive officer of Whole Foods Market. “We are very proud of our balance sheet and that, despite a much tougher year-ago comparison, we are reporting our sixth consecutive quarter of accelerating two-year identical store sales growth.”

Key Stats:

The company has enjoyed double-digit year-over-year revenue growth for the past five quarters. Over that span, the company has averaged growth of 13.7%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 15.2% from the year earlier quarter.

The company has now seen net income rise in three-straight quarters. In the first quarter, net income rose 60.9% and in the fourth quarter of the last fiscal year, the figure rose 57.9%.

Gross margins grew 0.3 percentage point to 35.6%. The growth seemed to be driven by increased revenue, as the figure rose 11.6% from the year earlier quarter while costs rose 11%.

Competitors to Watch: Safeway Inc. (NYSE:SWY), The Kroger Co. (NYSE:KR), SUPERVALU INC. (NYSE:SVU), The Fresh Market Inc (NASDAQ:TFM), Winn-Dixie Stores, Inc. (NASDAQ:WINN), Ingles Markets, Inc. (NASDAQ:IMKTA), Weis Markets, Inc. (NYSE:WMK), Ruddick Corporation (NYSE:RDK), Arden Group, Inc. (NASDAQ:ARDNA), and The Great Atlantic & Pacific Tea Co. (GAPTQ)

Stock Performance: Shares of WFMI are trading up 5.4%.

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