Whole Foods profit falls on costs
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Whole Foods Market Inc. said its fiscal fourth-quarter profit fell because of costs related to its purchase of Wild Oats Markets Inc.
Net income dropped to $33.9 million, or 24 cents a share, in the quarter ended Sept. 30 from $39.8 million, or 28 cents, a year earlier, Whole Foods said. Sales rose 35% to $1.74 billion. Excluding the Wild Oats stores, sales rose 16% to $1.6 billion.
Analysts, on average, were expecting a profit of 30 cents a share on sales of $1.62 billion, according to a survey by Thomson Financial.
The chain spent more to integrate Wild Oats stores, which it bought in August for $565 million. Whole Foods acquired the chain to help counter slowing growth and compete with Safeway Inc. and Trader Joe’s, which sell organic and prepared food.
“It takes time to redesign and reset stores, and so you are talking about watching them over a year of improving the store operations,” said Matt Patsky, portfolio manager at Boston-based Winslow Management Co.
Whole Foods, based in Austin, Texas, fell 81 cents, or 1.9%, to $42.25 before the earnings announcement.
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