Whole Foods Market’s first-quarter revenue jumped 10% as same-store sales grew at a rate that matched analysts’ projections. Here are the key points from Wednesday’s quarterly earnings report.
What you need to know: The upscale grocery chain posted quarterly revenue of $4.7 billion, which is up from $4.2 billion during the same quarter last year. Profits rose nearly 6% year-over-year, to $167 million, or 46 cents per share. The results just squeaked past Wall Street’s forecasts, as analysts predicted earnings of 45 cents per share, according to Thomson Reuters.
Strong same-store sales helped rally Whole Foods’ (WFM) share price, which gained 2.8% in after-hours trading after already rising 0.9% during the day. Whole Foods also said Wednesday that it is targeting same-store sales growth for the full year “in the low to middle single digits.”
The big number: Same-store sales, which are an important gauge for judging retailers’ performance, grew 4.5% during the quarter after climbing 3.1% during the previous quarter. In July, Whole Foods’ stock dropped after the company reported third-quarter same-store sales grew 3.9% when analysts had predicted 4.5% growth.
In a statement, co-CEO Walter Robb attributed the company’s sales growth to “customers’ positive response to our many strategic initiatives, along with improving consumer confidence.” Whole Foods recently began lowering its prices in an effort to fight the perception that the grocery chain caters only to affluent shoppers — a reputation that earned the store the nickname “Whole Paycheck.”
The company also recently ran its first national advertising campaign and tested its first-ever rewards program in an effort to hang onto market share. Whole Foods has faced increased competition from other high-end grocery chains as well as other retailers offering more organic products.
What you might have missed: Whole Foods opened nine new stores in the quarter and another three stores have already opened in the current quarter. Whole Foods plans to open eight more locations by the end of this quarter and it has signed 11 new leases for future sites, including three in Canada.
Last year, a Fortune cover story detailed Whole Foods’ growth plan, including plans to go from its current roster of 408 stores to more than 500 by 2017. The company said Wednesday it is on pace to hit that goal while eventually reaching 1,200 locations.
