Whole Foods FY 3Q15 Earnings Call Notes

Opened 8 new stores

“Year-over-year, our quarterly sales grew $255 million to a record $3.6 billion. We opened eight new stores, increasing our operating square footage 11% to 16 million and expanding our reach to 422 stores across 41 states and three countries.”

Negative publicity sharply impacted comps

“Comps dropped sharply in week 11, after our New York City weights and measures audit received national media attention, and averaged just 0.4% for the last two weeks of the quarter.”

The weights and measures issue was inadvertent human error

“I want to emphasize, these were not systematic, but rather caused by inadvertent human error. The audit included errors that were favorable to customers as well. These are weights and measures issues that can be found in any supermarket.”


“Year-to-date, we have produced industry-leading sales per gross square foot of $990, over $1 billion in EBITDA, and $1 billion in cash flow from operations.’

Still see room for 1200 stores

“424 stores totaling more than 16 million square feet today, we expect to cross the 500-store mark in fiscal year 2017, and over the longer term, continue to see potential for 1,200 Whole Foods Market stores in the United States.”

First 365 store going to open in silver lake

“Our first 365 by Whole Foods Market store is scheduled to open in the Silver Lake area of Los Angeles, where we converted a lease in development from Whole Foods Market to 365.’

We’re victims here

“It’s a very small percentage of our total product. It’s just something that went viral in the media, and it has hurt our trust and yet, we do feel like we’re victims of – we don’t know exactly why the DCA went after Whole Foods like this, and we’re not sure why the media went crazy with it, but it did happen. We are taking steps to not give cause for this in the future.”

Slowed the rollout of the affinity program

“We have slowed down the rollout which we originally anticipated because we’ve gotten so much feedback from our customers about the features they like or the suggestions they have. So we’re on to a couple new markets and that’s where we are right now. We’re just going a little slower in order to get it right as we go’

We’re not going to slow down our growth unless we can’t find location that don’t produce ROICs that we’re looking for

“I think the key takeaway there is that we’re not going to slow down our growth unless we can’t find locations that are going to produce five-year EVAs on a present value basis and give us the returns on invested capital that we’re looking for. As long as we can, that’s how we’re going to continue to manage the business.”