Whole Foods Market (WFM) has reported 30.28 percent plunge in profit for the quarter ended Apr. 09, 2017. The company has earned $99 million, or $0.31 a share in the quarter, compared with $142 million, or $0.44 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $117 million, or $0.37 a share compared with $142 million or $0.44 a share, a year ago. 

Revenue during the quarter went up marginally by 1.11 percent to $3,737 million from $3,696 million in the previous year period. Gross margin for the quarter contracted 81 basis points over the previous year period to 34.09 percent. Total expenses were 95.42 percent of quarterly revenues, up from 93.48 percent for the same period last year. That has resulted in a contraction of 194 basis points in operating margin to 4.58 percent.

Operating income for the quarter was $171 million, compared with $241 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $316 million compared with $353 million in the prior year period. At the same time, adjusted EBITDA margin contracted 109 basis points in the quarter to 8.46 percent from 9.55 percent in the last year period.  

"We are accelerating our path to enhanced value creation to deliver better returns for our shareholders," said John Mackey, co-founder and chief executive officer of Whole Foods Market. "Today’s announcement is a powerful combination of accelerated initiatives and new cost savings with clear timelines to deliver. We are on a path to return to positive comparable store sales and earnings growth next year. Our increased dividend and new share repurchase authorization demonstrate our Board’s confidence in our long-term growth strategy and continued ability to generate strong cash flow. The Board will continue its comprehensive review of all opportunities to create value. We look forward to continuing our dialogue with shareholders and providing future updates on our progress."

For fiscal year 2017, Whole Foods Market forecasts revenue to grow at 1 percent. The company expects diluted earnings per share to be $1.30.

The company has spent $480 million cash to meet investing activities during the first six months as against cash outgo of $185 million in the last year period.

The company has spent $81 million cash to carry out financing activities during the first six months as against cash inflow of $174 million in the last year period.

Cash and cash equivalents stood at $412 million as on Apr. 09, 2017, down 48.82 percent or $393 million from $805 million on Apr. 10, 2016.

Working capital increases marginally
Whole Foods Market has recorded an increase in the working capital over the last year. It stood at $771 million as at Apr. 09, 2017, up 2.12 percent or $16 million from $755 million on Apr. 10, 2016. Current ratio was at 1.58 as on Apr. 09, 2017, up from 1.57 on Apr. 10, 2016.

Cash conversion cycle (CCC) has decreased to 4 days for the quarter from 13 days for the last year period. Days sales outstanding were almost stable at 5 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 9 days for the quarter compared with 18 days for the previous year period. At the same time, days payable outstanding was almost stable at 10 days for the quarter, when compared with the previous year period.