Whole Foods Market Finance Analysis
Whole Foods market generated $8.0 billion in sales in fiscal 2009, an increase of 1.0% over the previous years. Yet in fiscal 2009 same-store sales were down 4.3% over the previous years. Operating income for Whole Foods was $284.3 million in fiscal 2009, up to 20.4% over the previous year. This improvement was largely due to stringent cost-containment measures that Whole Foods put into place in the face of the recession economy.
The ratio comparison in table in the appendix suggests that Whole Foods Market inc. is in good shape financially, healthy company. Whole Foods market is liquid company; it has high liquidity- strong cash flow to cover its debts and future projects. Our analysis of Whole …show more content…
Whole Foods Market Inc. , said quarterly profit more than doubled and raised its 2010 sales forecast, reflecting an improving economy that’s bolstering organic and specialty grocers.
Large, traditional grocery chains, such as Kroger Co. and Safeway are struggling to emerge from recession and are locked in price-cutting battles for market share with Wal-Mart Stores Inc.. Little, if any sales growth is expected for major food retailers this year. (cattlenetwork.com)
The key to Whole Foods Market success is effective marketing and finance strategies: * Whole Foods market does not spend a lot on advertising; its advertising costs are very low-0.4%, compare to industry average -1.4 %. * Sales per square footage are higher than big box stores like Wal-Mart, Safeway or Kroger. Metric | CompSalesGrowth | Square FootageGrowth | RevenuePer squareFootage | NewStoreAdditions | Closures | GrossMargin% | OperatingMargin% | NetProfitMargin% | Sales | Whole Foods Market | 11.0 | 9.6 | 879.3 | 14 | 3 | 35.0 | 5.7 | 3.6 | 6.1 | Safeway | 5.9 | (-1.3) | 474.3 | 21 | 48 | 28.9 | 3.2 | 1.5 | N/A | Wal-Mart | 3.0 | 8.6 | | 140 | 2 | NA | 23.1 | 5.9 | 3.6 |
* Largest and Superior leader of organic food retailers in the business. * Whole financing (Whole Foods holds $570 million of cash and $734 million of debt). Also the beta for Whole Foods is 0. 82, it is higher than industry average-0.74. The stocks of natural food retailers tend