Whole Foods 2014 Annual Report Download - page 24

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• Cash flow from operations totaled $1.1 billion, and free cash flow was $378 million.
• We returned $170 million in dividends to shareholders.
• We repurchased 13.9 million shares of common stock totaling $578 million.
Targets for Fiscal Year 2015
The Company is focusing on metrics it believes are key to the long-term health of the Company. The Company’s annual targets
for fiscal year 2015 are:
• Sales growth over 9%;
• Comparable store sales growth in the low to middle single digits;
• Square footage growth of 9% to 10% based on 38 to 42 new stores, including five to six relocations;
• EBITDA margin of approximately 9%; and
• ROIC greater than 14%.
The Company expects to continue its value strategy and to make additional investments in areas such as technology, marketing,
and new and existing stores. The Company believes this is the right strategy to drive sales growth over the longer term. Reflecting
its ongoing value efforts, the Company expects a greater decline in gross margin, excluding LIFO, in fiscal year 2015 than in
fiscal year 2014. The Company expects to maintain expense discipline and improve its cost structure, with the biggest savings
coming from internal distribution, coordinated purchasing and labor leverage. Results may fluctuate on a quarterly basis, but
for fiscal year 2015, the Company expects annual diluted earnings per share growth in line with or slightly higher than sales
growth.
The Company expects store openings to be spread fairly evenly throughout the year, with the seven former Dominick’s locations
re-opening as Whole Foods Market stores in the last three quarters of the year. The Company also notes that Easter will fall in
the second quarter of fiscal year 2015 versus the third quarter of fiscal year 2014, positively impacting comparable store sales
growth in the second quarter and negatively impacting comparable store sales growth in the third quarter by an estimated 50 to
60 basis points.
Results of Operations
The following table sets forth the Company’s consolidated statements of operations data expressed as a percentage of sales:
2014 2013 2012
Sales 100.0% 100.0% 100.0%
Cost of goods sold and occupancy costs 64.5 64.2 64.5
Gross profit 35.5 35.8 35.5
Direct store expenses 25.3 25.4 25.5
General and administrative expenses 3.1 3.1 3.2
Pre-opening expenses 0.5 0.4 0.4
Relocation, store closure and lease termination costs 0.1 0.1 0.1
Operating income 6.6 6.8 6.4
Investment and other income, net of interest expense 0.1 0.1 0.1
Income before income taxes 6.7 6.9 6.4
Provision for income taxes 2.6 2.7 2.4
Net income 4.1% 4.3% 4.0%
Figures may not sum due to rounding.
Sales
Sales totaled approximately $14.2 billion, $12.9 billion and $11.7 billion in fiscal years 2014, 2013 and 2012, respectively,
representing increases of 9.9%, 10.4% and 15.7% over the previous fiscal years, respectively. Sales increases for all years are
due to comparable store sales increases and stores opened or acquired less than one fiscal year. Sales growth percentages reflect
an additional week of sales in fiscal year 2012, a 53-week year. Total sales increased 12.6% in fiscal year 2013 over the previous
fiscal year on a comparative 52-week basis. Comparable store sales increased 4.3%, 6.9% and 8.7% during fiscal years 2014,
2013 and 2012, respectively, and contributed approximately 94.3%, 94.5% and 95.3% to total sales in fiscal years 2014, 2013
and 2012, respectively. As of September 28, 2014, there were 360 locations in the comparable store base as compared to 335
locations and 311 locations as of September 29, 2013 and September 30, 2012, respectively.