Whole Foods said net income fell 31% to $33.9 million in the latest quarter as a consumer bust in the U.S. continued to take a heavy toll on the company. In response to the slowing economy, the company has cut back store openings and has started to offer more discounts and emphasize value in its marketing- a bad sign for margins.
Natural-foods grocer Whole Foods Market said its fiscal second-quarter profit fell 13% as the company's acquisition of rival Wild Oats Markets Inc. led to higher costs. Expenses related to its acquisition of Wild Oats, including a write-off of Wild Oats store brands, had a negative impact on net income totaling $8.6 million.
Whole Foods profit fell 27% to $39.1 million as costs from the recent Wild Oats acquisition dragged on earnings.
Whole Foods reports a 15% decrease in profit primarily due to new store openings and legal fees incurred in the Wild Oats acquisition. Same store sales rose 8.2% in the quarter.
Profit drops 11% due to the expense of opening new stores and increasing organic foods competition from traditional grocers such as Safeway Inc. Additionally, the company disclosed the Federal Trade Commission raised Anti-Trust concerns about Whole Foods' planned acquisition of competitor Wild Oats.
Whole Foods Market announces an agreement to acquire its rival Wild Oats for approximately $565 million, eliminating a key competitor. This would help the company to compete with larger traditional grocers, which are making inroads into the organic and prepared foods market.
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