Whole Food Markets (NASDAQ:WFM) Wants To Buy Investor Love

Whole Food Markets (NASDAQ:WFM) Wants To Buy Investor Love

$WFM

Whole Foods has also announced separately a new capital allocation plan including a new $1-B stock buyback program

Whole Foods Market Inc. (NASDAQ:WFM) reported F-Q-4 and FY 2015 results after markets closed Wednesday.

For the Quarter, the high-end grocery store chain posted EPS of 0.16 on revenues of $3.44-B. In the same frame a year ago, the company reported EPS of 0.35 on revenues of $3.26-B. Q-4 results compare to consensus estimates for adjusted EPS of 0.35 EPS and $3.47-B.

Q-4 results included a non-cash asset impairment charge of $46-M, or 0.08 per diluted share, and a restructuring charge of $34-M, or 0.06 per diluted share.

For the FY Whole Foods posted diluted EPS of 1.48 on revenues of $15.39-B, compared with F-Y 2014 EPS of 1.56 on revenues of $14.19-B. The consensus estimates called for adjusted EPS of 1.67 on revenues of $15.42-B.

Same-store sales slipped 0.2% on a comparable currency basis compared with the same period a year ago. Fiscal year comparable store growth came in at 2.5%.

Whole Foods guided F-Y 2016 sales to rise by 3% to 5%.

The company also plans to open 30 new stores in the next fiscal year.

Whole Foods has also announced separately a new capital allocation plan including a new $1-B stock buyback program and a quarterly dividend increase of 4% to 0.135 per share. Also included is a $500-M revolving credit facility and an announced intention to borrow $1-B in long-term debt before the end of the company’s F-Q-1. Proceeds from debt offerings would be used for general corporate purposes, including share buybacks.

For F-Y 2015 Whole Foods paid $184-M in Quarterly dividends to shareholders and repurchased $513-M of common stock. The company’s co-CEO, John Mackey, said:

In the face of increasing competition, we are not standing still. … We recognize the need to move faster and go deeper to rebuild traffic and sales and create a solid foundation for long-term profitable growth and are taking the necessary steps to better communicate our differentiation, improve our value perception, and fundamentally evolve our business.

The capital allocation announcement has not been enough to turn the heads of investors who are undoubtedly disappointed at the poor earnings show and the miss on estimated revenues.

Whole Foods’ shares traded down about 5.7% after-hours Wednesday at 28.95, below the stock’s 52-wk range of 29.73 – 57.57. The current low was marked Monday. Thomson Reuters had a consensus analyst price target of around 35.76/share before Wednesday’s report.

Stay tuned…

HeffX-LTN

Paul Ebeling

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