Whole Foods 2015 Annual Report Download - page 3

Dear Stakeholders,
Customers have never shown greater interest in what they eat, where it comes from and who's
growing it. Whole Foods Market has been a driving force behind this shift in consciousness, and our
mission, commitment to transparency, and culture of innovation are more relevant and timely than
ever. The increasing adoption of fresh, healthy foods by the mainstream, however, has led to a rapid
expansion of natural and organic product offerings across many different channels. This increase
in competition, combined with headwinds from our own growth and value initiatives, has had an
impact on our business.
For the Àscal year, we increased sales  to a record . billion, producing industryleading sales
per gross sTuare foot of . $fter appearing to stabilize in the Àrst Tuarter, our comparable store
sales moderated over the remainder of the year. In a challenging sales environment, we generated
healthy returns with over . billion in (%IT'$, a record . billion in cash Áow from operations
and a  return on invested capital. Through our strong balance sheet and robust cash Áows, we
selffunded our strategic growth initiatives and a record  new store openings, returned close to
 million to our shareholders through dividends and share repurchases, and ended the year with
 million in cash and investments.
6ubseTuent to the end of the Àscal year, we announced a new capital allocation strategy. 5eÁecting
conÀdence in our future growth and cash Áow generation, while expanding our commitment to return
capital to our shareholders, our %oard of 'irectors authorized a new  billion share repurchase
program and a  increase in our Tuarterly dividend. In addition, we entered into a  million Àve
year revolving credit facility and issued  billion of senior notes. Through this new capital allocation
strategy, we took advantage of attractive conditions in the debt markets and lowered our overall cost
of capital, while preserving Ànancial Áexibility for our future growth initiatives.
In this dynamic marketplace, we are not standing still and made measurable progress over the past
year on many of our strategic initiatives, including:
• First national brand campaign
• (xpanded value efforts in produce
• Implementation of Workday for online +5 management
• Introduction of a new labor scheduling tool
• Launch of our new mobile app
• 3ilot of our $fÀnity program in 3hiladelphia
• Leading $pple 3ay retailer, in both transactions and sales
• Instacart partnership offering fresh grocery delivery to more U.S. homes than any other
food retailer
• $nnouncement of our new  by Whole Foods Market format
• Initial rollout of our new, uniÀed pointofsale system
Values Matter
Some would say that increasingly everyone is selling the same food and that price is all that matters.
The reality is Whole Foods Market sells the highest quality food in the world, our standards lead the
industry, and our selection and instore experience cannot be matched by the competition. We are
going to be competitive on price where we need to be, but, Àrst and foremost, the Whole Foods
Market brand stands for the highest quality, selection and service. We believe values matter. It’s what
our customers tell us they love most about us, and we are not changing that.
2ne of the things we are doing is launching  by Whole Foods
Market, a complementary brand that will broaden our reach to new
customers and new markets. *uided by the same industryleading
quality standards, our  stores will allow us to address the value
quality proposition in a new way, while maintaining the integrity the
Whole Foods Market brand represents in the marketplace.
$s food retailing rapidly evolves ² from online delivery in one hour to clickandcollect to personal
shoppers, we envision a fusion of the store experience and technology, with the customer at the center.
1o one delivers the dynamic and compelling instore experience that we do. We will keep innovating and
creating environments where people can connect and Ànd a sense of community ² in our stores and in
the digital world. Our strategy revolves around leading a race to the top in terms of a differentiated customer
experience: continuing to raise the bar on quality and selection, providing new levels of transparency
and accountability, and leveraging technology to deliver an improved shopping experience.
$s the consciousness about fresh, healthy foods is awakening, and the ways in which people want to
buy their food evolve, the market opportunity is continuing to expand. There will be more than one
winner it is not a zerosum game. Where our company is today is Must a fraction of where we think we
will be  years from now.
Our Business Model Continues to Benefit
All of Our Stakeholders
Our more than , team members are the heart and soul of our company and our ´notsosecretµ
ingredient. Last -anuary, we were extremely pleased to be ranked once again on FO5TU1(’s list of the
´ %est Companies to Work for in $merica.µ To be one of only  companies ranked consecutively
for  years validates our commitment to our Core 9alue of ¶Supporting Team Member +appiness
and (xcellence.’ We created , new Mobs this past year, and continue to see low turnover and good
morale as our team members embrace the advancement opportunities that our growth offers.
Our support of and leadership in causes that are important to our communities have created
a loyal core customer base aligned with our mission and Core 9alues. This year, our donations