Whole Foods 2013 Annual Report Download - page 32

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Comparable stores, relocated stores and remodels excluded from the identical store base, identical stores, and stores open less
than one fiscal year were as follows:
2013 2012 2011
Comparable stores 335 311 298
Relocated stores (6) (7) (6)
Stores with major remodels (4) (3) (1)
Identical stores 325 301 291
Stores open less than one fiscal year 32 25 18
Gross Profit
Gross profit totaled approximately $4.6 billion, $4.2 billion and $3.5 billion in fiscal years 2013, 2012 and 2011, respectively.
Gross profit as a percentage of sales increased 31 basis points and 53 basis points in fiscal year 2013 and 2012, respectively,
driven primarily by improvement in occupancy costs and costs of goods sold. Additionally, the increase in gross profit as a
percentage of sales in fiscal year 2012 reflects a 10 basis point improvement in LIFO, due to the moderation of inflation during
the year.
We remain committed to expanding our value offerings across the store, increasing our promotional activity and improving our
relative price positioning. Our customers continue shifting their buying toward organic and exclusive branded products, higher
priced tiers, and to several discretionary categories. Our sales momentum and operating disciplines, helped generate strong gross
profit performance, with occupancy leverage, shrink reduction and buyside initiatives more than offsetting the impact of our
value initiatives.
Our gross profit may increase or decrease slightly depending on the mix of sales from new stores, our value strategy, or the
impact of commodity costs or a host of other factors, including possible supply shortages and extreme weather-related disruptions.
Relative to existing stores, gross profit margins tend to be lower for new stores and increase as stores mature, reflecting lower
shrink as volumes increase, as well as increasing experience levels and operational efficiencies of the store teams.
Direct Store Expenses
Direct store expenses totaled approximately $3.3 billion, $3.0 billion and $2.6 billion in fiscal years 2013, 2012 and 2011,
respectively. During fiscal year 2013, the 7 basis point decrease in direct store expenses as a percentage of sales reflects leverage
in wages. The 51 basis point decrease in direct store expenses as a percentage of sales in fiscal year 2012 primarily reflects
leverage of 25 basis points in wages, 16 basis points in depreciation expense, and 8 basis points in health care costs.
General and Administrative Expenses
General and administrative expenses totaled approximately $397 million, $372 million and $311 million in fiscal years 2013,
2012 and 2011, respectively. During fiscal year 2013, general and administrative expenses as a percentage of sales improved
11 basis points due primarily to leverage in wages. Higher wages and share-based payment expense, resulting primarily from
our higher stock price, drove the 10 basis point increase in general and administrative expenses as a percentage of sales during
fiscal year 2012.
Share-based payment expense was included in the following line items on the Consolidated Statements of Operations for the
fiscal years indicated (in millions):
2013 2012 2011
Cost of goods sold and occupancy costs $ 2 $ 2 $ 1
Direct store expenses 32 22 14
General and administrative expenses 23 18 12
Share-based payment expense before income taxes 57 42 27
Income tax benefit (22) (16) (10)
Net share-based payment expense $ 35 $ 26 $ 17
Pre-opening Expenses
Pre-opening expenses totaled approximately $52 million, $47 million and $41 million in fiscal years 2013, 2012 and 2011,
respectively. The Company opened 32, 25 and 18 new store locations during fiscal years 2013, 2012 and 2011, respectively.