AUSTIN, Texas, Nov. 7, 2012 (GLOBE NEWSWIRE) -- Whole Foods Market, Inc. WFM today reported results for the 13-week fourth quarter ended September 30, 2012. Year-over-year increases stated herein reflect the comparison of 13 weeks in fiscal year 2012 to 12 weeks in fiscal year 2011. Sales increased 24% to $2.9 billion. Comparable store sales increased 8.5%, and identical store sales, excluding three relocations and two expansions, increased 8.3%. Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased 36% from the prior year to $252.2 million, net income increased 49% to $112.7 million, and diluted earnings per share increased 44% to $0.60.
"We ended the year with strong sales growth and record fourth quarter results, delivering the best year in our Company's 32-year history," said John Mackey, co-founder and co-chief executive officer of Whole Foods Market. "The pace of new store openings and lease signings continues to increase, and our accelerated growth plans are on track. We expect healthy comparable store sales growth and continuing operating margin improvement in fiscal year 2013."
The following table shows the Company's comparable and identical store sales results for the last five quarters and for the first five weeks of the first quarter through November 4, 2012. Sales growth for the fourth quarter of fiscal year 2012 is presented on a 12-week to 12-week basis.
| 4Q11 | 1Q12 | 2Q12* | 3Q12* | 4Q12 |
QTD 1Q13** |
|
| Sales growth | 12.2% | 12.9% | 13.6% | 13.6% | 14.1% | 12.5% |
| Comparable store sales growth | 8.7% | 8.7% | 9.5% | 8.2% | 8.5% | 7.3% |
| Two-year comps | 17.4% | 17.7% | 17.3% | 16.6% | 17.3% | 15.9% |
| Identical store sales growth | 8.4% | 8.2% | 9.0% | 8.0% | 8.3% | 7.1% |
| Two-year idents | 17.1% | 17.3% | 16.8% | 16.1% | 16.7% | 15.3% |
| Sequential basis point change | 53 | 24 | (48) | (75) | 64 | |
| Three-year idents | 14.8% | 19.8% | 24.5% | 24.5% | 25.4% | 24.2% |
| Sequential basis point change | 206 | 502 | 472 | (2) | 90 | |
| *Comparable and identical store sales growth includes a positive 55 basis point impact in 2Q12 and a negative 62 basis point impact in 3Q12 from the Easter shift, calculated by excluding Easter week from both the current and prior years. | ||||||
| **Comparable and identical store sales growth reflects a negative impact from Hurricane Sandy. | ||||||
Hurricane Sandy negatively impacted sales for the first five weeks of the first quarter, particularly in the Northeast region. The Company has property, flood, casualty, and business interruption insurance coverage and has just started the process of working with its insurer to assess damages, a process that could take several months. The Company expects to record a one-time charge in the first quarter for estimated uninsured losses.
For the quarter, gross profit increased 76 basis points to 35.3% of sales driven by improvements in both cost of goods sold and occupancy costs as a percentage of sales. The LIFO credit was $1.9 million this year versus a charge of $3.8 million in the prior year, a positive impact of 22 basis points. Direct store expenses improved 40 basis points to 25.5% of sales due primarily to leverage in wages and depreciation as a percentage of sales. As a result, store contribution improved 117 basis points to 9.8% of sales.
For stores in the identical store base, gross profit improved 84 basis points to 35.3% of sales, direct store expenses improved 64 basis points to 25.2% of sales, and store contribution improved 148 basis points to 10.1% of sales.
The effective tax rate was 36.4%, in line with the prior year but below the Company's year-to-date average in the third quarter of 38.6% due to an increase in state tax credits, along with a one-time reduction of reserves for tax positions related to a prior acquisition.
During the quarter, the Company produced $188.8 million in cash flow from operations and invested $130.3 million in capital expenditures, of which $72.9 million related to new stores. This resulted in free cash flow of $58.6 million. In addition, the Company received $45.0 million in proceeds from the exercise of team member stock options and paid $25.8 million in dividends to shareholders.
Additional information on the quarter for comparable stores and all stores is provided in the following table.
| # of | Total | ||||
| Comparable Stores | Comps | ROIC | Stores | Average Size | Square Feet |
| Over 15 years old (19 years old, s.f. weighted) | 6.4% | 137% | 72 | 27,400 | 1,971,400 |
| Between 11 and 15 years old | 8.2% | 79% | 73 | 32,000 | 2,337,500 |
| Between eight and 11 years old | 5.9% | 85% | 43 | 37,200 | 1,600,700 |
| Between five and eight years old | 8.0% | 47% | 53 | 50,700 | 2,687,300 |
| Between two and five years old | 11.4% | 19% | 51 | 49,700 | 2,533,500 |
| Less than two years old (including three relocations) | 15.9% | 16% | 19 | 38,700 | 734,900 |
| All comparable stores (9.3 years old, s.f. weighted) | 8.4% | 52% | 311 | 38,200 | 11,865,300 |
| All stores (8.7 years old, s.f. weighted) | 44% | 335 | 38,000 | 12,735,100 |
Fiscal Year Results
For the 53 weeks ended September 30, 2012, sales increased 16% to $11.7 billion, comparable store sales increased 8.7%, and identical store sales, excluding seven relocations and three expansions, increased 8.4%. EBITDA increased 26% to $1.1 billion, net income increased 36% to $465.6 million, and diluted earnings per share increased 31% to $2.52.
For the fiscal year, the Company produced $919.7 million in cash flow from operations and invested $456.2 million in capital expenditures, of which $261.7 million related to new stores. This resulted in free cash flow of $463.5 million. In addition, the Company received $370.2 million in proceeds from the exercise of team member stock options, paid $94.5 million in dividends to shareholders, and repurchased $28.6 million of common stock.
The Company finished the year with total cash and cash equivalents, restricted cash, and investments of $1.5 billion, a year-over-year increase of $745.4 million. Total debt (capital lease obligations) was $24.1 million.
The Company today announced that its Board of Directors declared a 43% increase in the Company's quarterly dividend to $0.20 per share from $0.14 per share. The next dividend is payable on January 29, 2013 to shareholders of record as of January 18, 2013.
"The Board's decision to increase our dividend for the second consecutive year reflects another year of record-setting financial performance, and underscores our confidence in our future growth and cash flow generation," said Walter Robb, co-chief executive officer of Whole Foods Market. "With $1.3 billion in available cash, we expect to continue to internally fund our accelerated new store growth, maintain a healthy reserve, and create additional value for our shareholders through selective share repurchases and a higher dividend."
The following table shows the Company's results for the fiscal year for certain line items compared to its historical five-year ranges and averages. Fiscal year 2012 sales growth is presented on a 52-week to 52-week basis.
| FY07-FY11 Results | ||||
| Low | High | Average | FY12 | |
| Sales growth | 1.0% | 23.6% | 12.8% | 13.5% |
| Comparable store sales growth | -3.1% | 8.5% | 4.9% | 8.7% |
| Identical store sales growth | -4.3% | 8.4% | 4.0% | 8.4% |
| Ending square footage growth | 5.3% | 46.0% | 14.1% | 7.6% |
| Percent of sales from new & relocated stores | 4.2% | 8.8% | 6.4% | 5.4% |
| Gross profit | 34.0% | 35.0% | 34.6% | 35.5% |
| Direct store expenses | 26.0% | 26.7% | 26.3% | 25.5% |
| Store contribution | 7.5% | 9.0% | 8.3% | 10.0% |
| G&A expenses | 3.0% | 3.4% | 3.2% | 3.2% |
Growth and Development
The Company opened seven stores in the fourth quarter and has opened seven stores so far in the first quarter. The Company expects to open three additional stores in the first quarter. The Company currently has 342 stores totaling approximately 13.0 million square feet.
The Company recently signed 11 new leases averaging 37,500 square feet in size in Altamonte Springs, FL; Clearwater, FL; Hyannis, MA; North Carolina; Morristown, NJ; New York City, NY (two stores); Philadelphia, PA; South Hills, PA; Dallas, TX; and Seattle, WA. These stores currently are scheduled to open in fiscal year 2014 and beyond.
In addition, the Company recently announced plans to purchase six leases from Johnnie's Foodmaster, expanding its presence in the Greater Boston area to 26 stores. The six leases include South Weymouth, Arlington, Charlestown, Brookline, Melrose and Somerville and average 31,000 square feet in size. Johnnie's Foodmaster will close the stores prior to the November 30 transaction closing date. The Company plans to remodel and reopen the locations as Whole Foods Market stores before the end of September 2013. The Company does not expect this transaction to be material to sales or earnings in fiscal year 2013.
The following table provides additional information about the Company's store openings in fiscal years 2011, 2012 and 2013 year to date; leases currently tendered but unopened; and total development pipeline (including leases currently tendered) for stores scheduled to open through fiscal year 2016.
| Stores | Stores | Stores | Current | Current | |
| Opened | Opened | Opened | Leases | Leases | |
| New Store Information | FY11 | FY12 | FY13 YTD | Tendered | Signed* |
| Number of stores (including relocations) | 18 | 25 | 7 | 12 | 79 |
| Number of relocations | 6 | 1 | 0 | 4 | 10 |
| Number of lease acquisitions, ground leases, | 2 | 0 | 0 | 2 | 9 |
| and owned properties | |||||
| New markets | 0 | 8 | 4 | 4 | 18 |
| Average store size (gross square feet) | 39,400 | 35,500 | 33,500 | 37,600 | 36,600 |
| Total square footage | 708,700 | 887,400 | 234,800 | 450,800 | 2,896,300 |
| Average tender period in months | 12.5 | 7.9 | 5.9 | ||
| Average pre-opening expense per store (incl. rent) | $2.5 mil | $1.7 mil | |||
| Average pre-opening rent per store | $1.2 mil | $0.6 mil | |||
| *Includes six Johnnie's Foodmaster leases. |
Outlook for Fiscal Year 2013
The following table provides information on the Company's estimated and actual results for fiscal year 2012, a 53-week year, as well as additional information about the Company's outlook for fiscal year 2013. The Company's outlook for fiscal year 2013 includes the recently announced acquisition of six leases from Johnnie's Foodmaster which is scheduled to close on November 30, 2012. It does not include the one-time charge the Company expects to record in the first quarter for Hurricane Sandy. On a 52-week to 52-week basis, the Company expects sales growth of 12% to 14%, comparable store sales growth of 6.5% to 8.5%, identical store sales growth of 6.0% to 8.0%, and diluted earnings per share growth of 14% to 16% to $2.83 to $2.87.
| FY12 (E) | FY12 (A) | FY13 | |
| 53 Weeks | 53 Weeks | 52-Week Outlook | |
| Sales growth | 15.6% - 15.8% | 15.7% | 10% - 12%* |
| Comparable store sales growth | 8.6% - 8.8% | 8.7% | 6.5% - 8.5% |
| Two-year comps | 17.1% - 17.3% | 17.3% | 15.2% - 17.2% |
| Identical store sales growth | 8.2% - 8.4% | 8.4% | 6.0% - 8.0% |
| Two-year idents | 16.6% - 16.8% | 16.7% | 14.4% - 16.4% |
| Three-year idents | 23.1% - 23.3% | 23.3% | 22.7% - 24.7% |
| Number of new stores | 25 | 25 | 32 - 34 |
| % of sales from new stores | 5% - 6% | 5.4% | 6% - 7% |
| Ending square footage growth | 7% | 7.6% | 8% |
| G&A expenses | 3.2% | 3.2% | 3.1% |
| Pre-opening and relocation costs | $54.5 -- $56 mil | $56.8 mil | $68 -- $73 mil |
| Operating margin | 6.4% | 6.4% | 6.6% - 6.7% |
| EBITDA | $1.05 -- $1.06 bil | $1.06 bil | $1.18 -- $1.20 bil |
| Tax rate | 38.6% | 38.1% | 38.6% - 39.0% |
| Diluted shares outstanding | 185 mil | 184 mil | 188 mil |
| Diluted EPS | $2.51 -- $2.52 | $2.52 | $2.83 -- $2.87 |
| YOY % change | 30% - 31% | 31% | 12% - 14%* |
| Capital expenditures | $440 -- $450 mil | $456.2 mil | $565 -- $615 mil |
| *On a 52-week to 52-week basis: | |||
| Sales growth | 13% - 14% | 13.5% | 12% - 14% |
| Diluted EPS growth | 27% | 28.2% | 14% - 16% |
The following table provides information about the Company's estimated store openings through fiscal year 2014.
| Estimated Openings | Relocations |
Average Square Feet per Store |
Ending Square Footage Growth |
|||
| Fiscal year 2013 | 32 - 34 | 5 | 34,000 | 8% | ||
| Fiscal year 2014 | 33 - 38 | 2-3 | 38,000 | 8% - 9% |
Over the long term, the Company considers 1,000 stores to be a reasonable indication of its market opportunity in the United States as the Whole Foods Market brand continues to strengthen, consumer demand for natural and organic products continues to increase, and the Company's flexibility on new store size opens up additional market opportunities. The Company believes Canada and the United Kingdom hold great promise as well.
About Whole Foods Market
Founded in 1980 in Austin, Texas, Whole Foods Market (www.wholefoodsmarket.com) is the leading retailer of natural and organic foods and America's first national "Certified Organic" grocer. In fiscal year 2012, the Company had sales of approximately $12 billion and currently has 342 stores in the United States, Canada, and the United Kingdom. Whole Foods Market employs approximately 73,000 Team Members and has been ranked for 15 consecutive years as one of the "100 Best Companies to Work For" in America by Fortune magazine.
The Whole Foods Market, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6063
Forward-looking statements
The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties, which could cause our actual results to differ materially from those described in the forward-looking statements. These risks include general business conditions, changes in overall economic conditions that impact consumer spending, including fuel prices and housing market trends, the impact of competition and other risks detailed from time to time in the SEC reports of Whole Foods Market, including Whole Foods Market's report on Form 10-K for the fiscal year ended September 25, 2011. Whole Foods Market undertakes no obligation to update forward-looking statements.
The Company will host a conference call today to discuss this earnings announcement at 4:00 p.m. CT. The dial-in number is (866) 952-1906, and the conference ID is "Whole Foods." A simultaneous audio webcast will be available at www.wholefoodsmarket.com.
| Whole Foods Market, Inc. | ||||
| Consolidated Statements of Operations (unaudited) | ||||
| (In thousands, except per share amounts) | ||||
| 13-weeks ended | 12-weeks ended | 53-weeks ended | 52-weeks ended | |
| September 30, 2012 | September 25, 2011 | September 30, 2012 | September 25, 2011 | |
| Sales | $ 2,910,327 | $ 2,353,833 | $ 11,698,828 | $ 10,107,787 |
| Cost of goods sold and occupancy costs | 1,883,747 | 1,541,521 | 7,543,054 | 6,571,238 |
| Gross profit | 1,026,580 | 812,312 | 4,155,774 | 3,536,549 |
| Direct store expenses | 740,806 | 608,618 | 2,983,419 | 2,628,811 |
| Store contribution | 285,774 | 203,694 | 1,172,355 | 907,738 |
| General and administrative expenses | 94,350 | 73,675 | 372,065 | 310,920 |
| Operating income before pre-opening and store closure | 191,424 | 130,019 | 800,290 | 596,818 |
| Pre-opening expenses | 14,001 | 10,885 | 46,899 | 40,852 |
| Relocation, store closure and lease termination costs | 1,826 | 1,826 | 9,885 | 8,346 |
| Operating income | 175,597 | 117,308 | 743,506 | 547,620 |
| Investment and other income, net of interest | 1,786 | 1,443 | 8,538 | 4,092 |
| Income before income taxes | 177,383 | 118,751 | 752,044 | 551,712 |
| Provision for income taxes | 64,651 | 43,276 | 286,471 | 209,100 |
| Net income | $ 112,732 | $ 75,475 | $ 465,573 | $ 342,612 |
| Basic earnings per share | $ 0.61 | $ 0.42 | $ 2.55 | $ 1.96 |
| Weighted average shares outstanding | 184,957 | 177,767 | 182,401 | 175,221 |
| Diluted earnings per share | $ 0.60 | $ 0.42 | $ 2.52 | $ 1.93 |
| Weighted average shares outstanding, diluted basis | 186,518 | 179,832 | 184,444 | 177,279 |
| Dividends declared per common share | $ 0.14 | $ 0.10 | $ 0.56 | $ 0.40 |
| A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations follows: | ||||
| 13-weeks ended | 12-weeks ended | 53-weeks ended | 52-weeks ended | |
| September 30, 2012 | September 25, 2011 | September 30, 2012 | September 25, 2011 | |
| Net income | ||||
| (numerator for basic and diluted earnings per share) | $ 112,732 | $ 75,475 | $ 465,573 | $ 342,612 |
| Weighted average common shares outstanding | 184,962 | 177,767 | 182,406 | 175,221 |
| Less: Unvested restricted stock | (5) | -- | (5) | -- |
| Weighted average common shares outstanding (denominator for basic earnings per share) | 184,957 | 177,767 | 182,401 | 175,221 |
| Potential common shares outstanding: | ||||
| Dilutive impact of restricted stock | 2 | -- | 1 | -- |
| Incremental shares from assumed exercise of stock options | 1,559 | 2,065 | 2,042 | 2,058 |
| Weighted average common shares outstanding and potential additional common shares outstanding (denominator for diluted earnings per share) | 186,518 | 179,832 | 184,444 | 177,279 |
| Basic earnings per share | $ 0.61 | $ 0.42 | $ 2.55 | $ 1.96 |
| Diluted earnings per share | $ 0.60 | $ 0.42 | $ 2.52 | $ 1.93 |
| Whole Foods Market, Inc. | ||
| Consolidated Balance Sheets (unaudited) | ||
| September 30, 2012 and September 25, 2011 | ||
| (In thousands) | ||
| Assets | 2012 | 2011 |
| Current assets: | ||
| Cash and cash equivalents | $ 89,016 | $ 212,004 |
| Short-term investments - available-for-sale securities | 1,131,213 | 442,320 |
| Restricted cash | 102,873 | 91,956 |
| Accounts receivable | 196,503 | 175,310 |
| Merchandise inventories | 374,269 | 336,799 |
| Prepaid expenses and other current assets | 76,511 | 73,579 |
| Deferred income taxes | 132,246 | 121,176 |
| Total current assets | 2,102,631 | 1,453,144 |
| Property and equipment, net of accumulated depreciation and amortization | 2,192,683 | 1,997,212 |
| Long-term investments - available-for-sale securities | 221,426 | 52,815 |
| Goodwill | 662,938 | 662,938 |
| Intangible assets, net of accumulated amortization | 62,399 | 67,234 |
| Deferred income taxes | 42,834 | 50,148 |
| Other assets | 9,305 | 8,584 |
| Total assets | $ 5,294,216 | $ 4,292,075 |
| Liabilities And Shareholders' Equity | ||
| Current liabilities: | ||
| Current installments of capital lease obligations | $ 1,012 | $ 466 |
| Accounts payable | 247,089 | 236,913 |
| Accrued payroll, bonus and other benefits due team members | 307,164 | 281,587 |
| Dividends payable | 25,959 | 17,827 |
| Other current liabilities | 395,964 | 342,568 |
| Total current liabilities | 977,188 | 879,361 |
| Long-term capital lease obligations, less current installments | 23,110 | 17,439 |
| Deferred lease liabilities | 440,822 | 353,776 |
| Other long-term liabilities | 50,627 | 50,194 |
| Total liabilities | 1,491,747 | 1,300,770 |
| Shareholders' equity: | ||
| Common stock, no par value, 600,000 and 300,000 shares authorized; 185,783 and 178,886 shares issued; and 185,437 and 178,886 shares outstanding in 2012 and 2011, respectively | 2,592,369 | 2,120,972 |
| Common stock in treasury, at cost | (28,599) | -- |
| Accumulated other comprehensive income (loss) | 5,266 | (164) |
| Retained earnings | 1,233,433 | 870,497 |
| Total shareholders' equity | 3,802,469 | 2,991,305 |
| Commitments and contingencies | ||
| Total liabilities and shareholders' equity | $ 5,294,216 | $ 4,292,075 |
| Whole Foods Market, Inc. | ||
| Consolidated Statements of Cash Flows (unaudited) | ||
| (In thousands) | ||
| 53-weeks ended | 52-weeks ended | |
| September 30, 2012 | September 25, 2011 | |
| Cash flows from operating activities | ||
| Net income | $ 465,573 | $ 342,612 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 311,550 | 287,109 |
| Loss on disposition of fixed assets | 2,223 | 2,228 |
| Share-based payment expense | 42,288 | 27,259 |
| LIFO expense | 100 | 10,250 |
| Deferred income tax expense (benefit) | (8,039) | 19,540 |
| Excess tax benefit related to exercise of team member stock options | (50,349) | (22,741) |
| Accretion of premium/discount on marketable securities | 15,710 | 6,164 |
| Deferred lease liabilities | 77,044 | 53,381 |
| Other | (1,695) | 866 |
| Net change in current assets and liabilities: | ||
| Accounts receivable | (29,879) | (35,422) |
| Merchandise inventories | (37,075) | (23,267) |
| Prepaid expenses and other current assets | (1,779) | (18,987) |
| Accounts payable | 9,606 | 23,768 |
| Accrued payroll, bonus and other benefits due team members | 25,285 | 37,204 |
| Other current liabilities | 94,918 | 53,831 |
| Net change in other long-term liabilities | 4,234 | (8,950) |
| Net cash provided by operating activities | 919,715 | 754,845 |
| Cash flows from investing activities | ||
| Development costs of new locations | (261,710) | (203,457) |
| Other property and equipment expenditures | (194,539) | (161,507) |
| Purchase of available-for-sale securities | (3,009,503) | (1,228,920) |
| Sale of available-for-sale securities | 2,138,221 | 1,155,795 |
| Increase in restricted cash | (10,917) | (5,154) |
| Other investing activities | (2,901) | (7,481) |
| Net cash used in investing activities | (1,341,349) | (450,724) |
| Cash flows from financing activities | ||
| Common stock dividends paid | (94,505) | (52,620) |
| Issuance of common stock | 370,226 | 296,719 |
| Purchase of treasury stock | (28,599) | -- |
| Excess tax benefit related to exercise of team member stock options | 50,349 | 22,741 |
| Payments on long-term debt and capital lease obligations | (305) | (490,394) |
| Net cash provided by (used in) financing activities | 297,166 | (223,554) |
| Effect of exchange rate changes on cash and cash equivalents | 1,480 | (559) |
| Net change in cash and cash equivalents | (122,988) | 80,008 |
| Cash and cash equivalents at beginning of period | 212,004 | 131,996 |
| Cash and cash equivalents at end of period | $ 89,016 | $ 212,004 |
| Supplemental disclosure of cash flow information: | ||
| Interest paid | $ 2,839 | $ 15,837 |
| Federal and state income taxes paid | $ 201,771 | $ 192,485 |
| Whole Foods Market, Inc. | ||||
| Non-GAAP Financial Measures (unaudited) | ||||
| (In thousands) | ||||
| The Company provides certain non-GAAP financial measures when those measures provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. These measures are not in accordance with, or an alternative to, GAAP. Since the fourth quarter and fiscal year ended September 30, 2012 contained an additional week, our operating results are not directly comparable to the prior year. We believe adjusting the reported results for the 13-week and 53-week periods ended September 30, 2012 provides more comparable results quarter-over-quarter and year-over-year. For that reason, the Company reported sales growth and diluted EPS growth on 12-week and 52-week bases. The Company adjusted the 13-week and 53-week periods by removing one-thirteenth of the 13-week period results to remove the estimated impact of the additional week in the current year, as shown below. | ||||
| 13-weeks ended | 12-weeks ended | 53-weeks ended | 52-weeks ended | |
| September 30, 2012 | September 25, 2011 | September 30, 2012 | September 25, 2011 | |
| Sales | $ 2,910,327 | $ 2,353,833 | $ 11,698,828 | $ 10,107,787 |
| Less: 1/13 of Q4 sales | 223,871 | -- | 223,871 | -- |
| Sales adjusted to 12-week quarter & 52-week year | $ 2,686,456 | $ 2,353,833 | $ 11,474,957 | $ 10,107,787 |
| Net income | $ 112,732 | $ 75,475 | $ 465,573 | $ 342,612 |
| Less: 1/13 of Q4 net income | 8,672 | -- | 8,672 | -- |
| Net income adjusted to 12-week quarter & 52-week year | $ 104,060 | $ 75,475 | $ 456,901 | $ 342,612 |
| Basic earnings per share, as reported | $ 0.61 | $ 0.42 | $ 2.55 | $ 1.96 |
| Basic earnings per share, adjusted | $ 0.56 | $ 0.42 | $ 2.50 | $ 1.96 |
| Weighted average shares outstanding | 184,957 | 177,767 | 182,401 | 175,221 |
| Diluted earnings per share, as reported | $ 0.60 | $ 0.42 | $ 2.52 | $ 1.93 |
| Diluted earnings per share, adjusted | $ 0.56 | $ 0.42 | $ 2.48 | $ 1.93 |
| Weighted average shares outstanding, diluted basis | 186,518 | 179,832 | 184,444 | 177,279 |
| Whole Foods Market, Inc. | ||||
| Non-GAAP Financial Measures (unaudited) | ||||
| (In thousands) | ||||
|
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides information regarding Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Return on Invested Capital ("ROIC") and Free Cash Flow in the press release as additional information about its operating results. These measures are not in accordance with, or an alternative to, GAAP. The Company's management believes that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company as well as a component of incentive compensation. The Company defines Adjusted EBITDA as EBITDA plus non-cash share-based payment expense and deferred rent. The following is a tabular presentation of the non-GAAP financial measure Adjusted EBITDA including a reconciliation to GAAP net income, which the Company believes to be the most directly comparable GAAP financial measure. |
||||
| 13-weeks ended | 12-weeks ended | 53-weeks ended | 52-weeks ended | |
| EBITDA and Adjusted EBITDA | September 30, 2012 | September 25, 2011 | September 30, 2012 | September 25, 2011 |
| Net income | $ 112,732 | $ 75,475 | $ 465,573 | $ 342,612 |
| Provision for income taxes | 64,651 | 43,276 | 286,471 | 209,100 |
| Investment and other income, net of interest | (1,786) | (1,443) | (8,538) | (4,092) |
| Operating income | 175,597 | 117,308 | 743,506 | 547,620 |
| Depreciation and amortization | 76,649 | 68,027 | 311,550 | 287,109 |
| Earnings before interest, taxes, depreciation & amortization (EBITDA) | 252,246 | 185,335 | 1,055,056 | 834,729 |
| Deferred rent | 10,201 | 8,799 | 40,958 | 32,818 |
| Share-based payment expense | 13,149 | 8,169 | 42,288 | 27,259 |
| Adjusted EBITDA | $ 275,596 | $ 202,303 | $ 1,138,302 | $ 894,806 |
| The Company defines ROIC as annualized adjusted earnings divided by average invested capital. Earnings are annualized on a 52-week basis. Adjustments to earnings are defined in the following tabular reconciliation. Invested capital represents a trailing four-quarter average. | ||||
| 13-weeks ended | 12-weeks ended | 53-weeks ended | 52-weeks ended | |
| ROIC | September 30, 2012 | September 25, 2011 | September 30, 2012 | September 25, 2011 |
| Net income | $ 112,732 | $ 75,475 | $ 465,573 | $ 342,612 |
| Interest expense, net of taxes | 91 | -- | 219 | 2,411 |
| Adjusted earnings | 112,823 | 75,475 | 465,792 | 345,023 |
| Total rent expense, net of taxes1 | 54,473 | 47,176 | 211,344 | 193,609 |
| Estimated depreciation on capitalized operating leases, net of taxes2 | (36,315) | (31,451) | (140,896) | (129,073) |
| Adjusted earnings, including interest related to operating leases | 130,981 | 91,200 | 536,240 | 409,559 |
| Annualized adjusted earnings | $ 451,292 | $ 327,058 | $ 457,115 | $ 345,023 |
| Annualized adjusted earnings, including interest related to operating leases | $ 523,924 | $ 395,200 | $ 526,204 | $ 409,559 |
| Average working capital, excluding current portion of long-term debt | $ 955,973 | $ 493,187 | $ 955,973 | $ 493,187 |
| Average property and equipment, net | 2,090,103 | 1,950,435 | 2,090,103 | 1,950,435 |
| Average other assets | 954,899 | 872,117 | 954,899 | 872,117 |
| Average other liabilities | (460,155) | (389,198) | (460,155) | (389,198) |
| Average invested capital | $ 3,540,820 | $ 2,926,541 | $ 3,540,820 | $ 2,926,541 |
| Average estimated asset base of capitalized operating leases3 | 2,740,419 | 2,501,264 | 2,740,419 | 2,501,264 |
| Average invested capital, adjusted for capitalization of operating leases | $ 6,281,239 | $ 5,427,805 | $ 6,281,239 | $ 5,427,805 |
| ROIC | 12.7% | 11.2% | 12.9% | 11.8% |
| ROIC, adjusted for capitalization of operating leases | 8.3% | 7.3% | 8.4% | 7.5% |
| 1 Total rent includes minimum base rent of all tendered leases | ||||
| 2 Estimated depreciation equals 2/3 of total rent expense | ||||
| 3 Estimated asset base equals 8x total rent expense | ||||
| The Company defines Free Cash Flow as net cash provided by operating activities less capital expenditures. The following is a tabular reconciliation of the Free Cash Flow non-GAAP financial measure. | ||||
| 13-weeks ended | 12-weeks ended | 53-weeks ended | 52-weeks ended | |
| Free Cash Flow | September 30, 2012 | September 25, 2011 | September 30, 2012 | September 25, 2011 |
| Net cash provided by operating activities | $ 188,829 | $ 159,642 | $ 919,715 | $ 754,845 |
| Development costs of new locations | (72,940) | (47,409) | (261,710) | (203,457) |
| Other property and equipment expenditures | (57,314) | (45,977) | (194,539) | (161,507) |
| Free Cash Flow | $ 58,575 | $ 66,256 | $ 463,466 | $ 389,881 |
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