Whole Foods 2007 Annual Report Download - page 33

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Net income for fiscal year 2007 totaled approximately $182.7 million, and diluted earnings per share were $1.29.
Our capital expenditures for fiscal year 2007 totaled approximately $529.7 million, of which approximately $389.3 million
was for new store development. We opened 21 new stores during fiscal year 2007, and we ended the fiscal year with 276
stores.
At the end of fiscal year 2007, the Company had total debt of approximately $760.9 million, including a $700 million term
loan used to finance the Wild Oats acquisition, approximately $21.8 million in Wild Oats and $2.7 million in Whole Foods
Market convertible debentures, approximately $19.4 million in capital lease obligations and approximately $17 million in
borrowings on the Company’s revolving line of credit. Subsequent to the end of fiscal year 2007, the Company paid off the
Wild Oats convertible debentures and the credit line balance.
Subsequent to the end of fiscal year 2007, the Company received approximately $165.1 million in proceeds from the sale of
the Henry’s and Sun Harvest stores.
The Company paid quarterly cash dividends totaling approximately $96.7 million during fiscal year 2007. On September 20,
2007, the Company’s Board of Directors approved a quarterly dividend of $0.18 per share that was paid on October 23, 2007
to shareholders of record on October 12, 2007. On November 20, 2007, the Company’s Board of Directors approved an 11%
increase in the Company’s quarterly dividend to $0.20 per share payable January 22, 2008 to shareholders of record on
January 11, 2008.
During fiscal year 2007, the Company repurchased approximately 2.5 million shares of Company common stock on the open
market for a total of approximately $100 million. The Company’s remaining authorization under the stock repurchase
program at September 30, 2007 is approximately $100 million through November 8, 2009.
Results of Operations
The following table sets forth the statements of operations data of Whole Foods Market expressed as a percentage of total
sales for the fiscal years indicated:
2007 2006 2005
Sales 100.0% 100.0% 100.0%
Cost of goods sold and occupancy costs 65.2 65.1 64.9
Gross profit 34.8 34.9 35.1
Direct store expenses 26.0 25.4 26.0
General and administrative expenses 3.3 3.2 3.4
Pre-opening and relocation costs 1.1 0.7 0.8
Operating income 4.5 5.7 4.9
Interest expense (0.1) - -
Investment and other income 0.2 0.4 0.2
Income before income taxes 4.6 6.1 5.0
Provision for income taxes 1.8 2.4 2.1
Net income 2.8% 3.6% 2.9%
Figures may not add due to rounding.
Sales
Sales totaled approximately $6.59 billion, $5.61 billion and $4.70 billion in fiscal years 2007, 2006 and 2005, respectively,
representing increases of 17.6%, 19.3% and 21.6% over the previous fiscal years, respectively. Adjusted to reflect a fifty-two
week period in fiscal year 2007, sales increased 15.3% over the prior fiscal year. Sales for fiscal year 2007 reflect five weeks
of sales from Wild Oats stores. Sales for all fiscal years shown reflect increases due to new stores opened and acquired and
comparable store sales increases of approximately 7.1%, 11.0% and 12.8% in fiscal years 2007, 2006 and 2005, respectively.
Sales of a store are deemed to be comparable commencing in the fifty-third full week after the store was opened or acquired.
Identical store sales increased approximately 5.8%, 10.3% and 11.5% in fiscal years 2007, 2006 and 2005, respectively.
Sales from relocations and remodels with expansions of square footage greater than 20% are excluded from identical store
sales data to reduce the impact of square footage growth on the comparison. Stores closed for eight or more days are
excluded from the comparable and identical store base in the first fiscal week of closure until re-opened for a full fiscal
week. Ending square footage growth from stores opened and acquired was approximately 46%, 10% and 13% for fiscal
years 2007, 2006 and 2005, respectively. In fiscal years 2007, 2006 and 2005, average transactions per week increased
approximately 4.3%, 5.6% and 6.9% over the prior fiscal year, respectively, and average basket size increased approximately
2.6%, 5.0% and 5.5% over the prior fiscal year, respectively. The Company believes the integration of the acquired Wild