Whole Foods Earnings Dominated by the Return of John Mackey as CEO

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Whole Foods Market Inc. (NASDAQ: WFM) released its fiscal fourth-quarter earnings report after the markets closed on Wednesday. The company posted $0.28 in earnings per share (EPS) and $3.5 billion in revenue, versus consensus estimates from Thomson Reuters that called for $0.24 in EPS and $3.5 billion in revenue. The same period from last year had $0.30 in EPS and $3.44 billion in revenue.

The company announced sweeping changes to its corporate structure eliminating the co-CEO positions in the company and consolidating it under just one CEO. John Mackey will be taking on this role. Former co-CEO Walter Robb will remain on the board of directors and continue to serve as Chairman for both Whole Kids Foundation and Whole Cities Foundation. The transition will take place on December 31, 2016.

Comparable store sales decreased 2.6%.

In terms of the outlook for the coming fiscal year, the company expects sales growth in the range of 2.5% to 4.5% and EPS of $1.42 or greater. There are consensus estimates calling for $1.47 in EPS and $16.43 billion in revenue for fiscal 2017.

John Mackey, co-founder and co-CEO of Whole Foods, commented:

In a year that presented many headwinds for food retailers, we made measurable progress on positioning our company for continued success while producing industry-leading sales per gross square foot and healthy returns on invested capital,” “Through our strong balance sheet and robust cash flow, we self-funded our new store development and technology investments and, in keeping with our capital allocation strategy, returned more than $1.1 billion to our shareholders through dividends and share repurchases.

During the quarter, Whole Foods produced $352 million in cash flow from operations, invested $195 million in capital expenditures, returned $44 million in quarterly dividends to shareholders, and repurchased $15 million of common stock.

Shares of Whole Foods closed Wednesday down 0.5% at $28.51, with a consensus analyst price target of $30.47 and a 52-week trading range of $27.67 to $35.58. After the earnings report was released, the stock was up initially 6.4% at $30.34 in the after-hours trading session.