Whole Foods 2Q Profit Up 33% On Higher Sales; Lifts Fiscal Year View

   DOW JONES NEWSWIRES 
 

Whole Foods Market Inc.'s (WFMI) fiscal second-quarter earnings grew 33% as same-store sales increased and gross margins expanded. The company said the results were the strongest it has reported in the past five years.

The natural-foods supermarket chain also raised its full-year earnings estimate to $1.87 to $1.90 a share from its prior view of $1.76 to $1.80. It sees sales growth of 11.7% to 12.6%, compared with the February view of up 10.7% to 12.8%.

Shares rose 5.8% to $63.20 in after-hours trading. The stock is up 18% this year through Wednesday's close.

Whole Foods has reported steady same-store sales growth of late as consumer demand for natural and organic products continues to increase, helping the company outperform its peers. The company's higher-income demographics are less affected by economic woes such as rising gas prices, although a report last week that said Whole Foods slowed orders to suppliers in April raised a red flag.

For the quarter ended April 10, Whole Foods reported a profit of $89.9 million, or 51 cents a share, up from $67.5 million, or 39 cents a share, a year earlier. Sales jumped 12% to $2.35 billion as same-store sales increased 7.8%.

Analysts surveyed by Thomson Reuters expected a profit of 46 cents on revenue of $2.37 billion.

Gross margin widened to 35.6% from 35.3%.

Whole Foods opened three stores, including one relocation, and has relocated one store so far in the current quarter. The company expects to open six additional new stores, including two relocations, in the third quarter. Whole Foods currently operates 304 locations totaling about 11.5 million square feet.

The company also said it would change its trading symbol to WFM from WFMI, effective Friday.

-By John Kell, Dow Jones Newswires; 212-416-2480; [e-mail]