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$WFM's net cash provided by operating activities for 16 weeks ended Jan. 17, 2016 declined to $232MM from $387MM in the previous year period, and net cash used in investing activities decreased to $108MM from $251MM. Net cash provided by financing activities was $319MM compared to net cash used in financing activities of $59MM last year.
Although it is really late to enter the e-commerce club, $COST has rolled out two new e-commerce initiatives - two-day (dry grocery) and same-day delivery (both dry and fresh grocery) last week. With $AMZN’s acquisition of $WFM set to shake the grocery industry, the warehouse club Costco is looking to expand the grocery offerings over time.
$AMZN's acquisition of $WFM will close on August 28, 2017. John Mackey will remain as CEO and $WFM’s headquarters will stay in Austin, Texas. Starting Aug. 28, Whole Foods Market will offer lower prices on a selection of staples across its stores. Amazon Prime will be integrated into $WFM’s point-of-sale system resulting in savings and benefits.
$MCD commented that the $AMZN-$WFM deal announcement demonstrates the disruptive and fast-paced nature of the business world. $MCD continues to challenge itself and is committed to remain competitive on value. $MCD believes deliveries are a good example of how the industry is responding to rapidly-changing consumer expectations.
When asked whether $MKC has got a chance to grow its presence in $WFM as a result of the $AMZN-$WFM merger, McCormick stated that it is well positioned based on the relationship with Amazon. The company added that it is under-represented at Whole Foods with some of $MKC's secondary brands in distribution.
$DRI commented that on the industry in general, it is seeing some weakness in Houston and New York City, but overall the company has not seen a lot of change in the competitive landscape. On the $AMZN's acquisition of $WFM, the company believes people still want to come to restaurants and the acquisition won't have a big impact on $DRI.
$AMZN is stepping into natural and organic foods supermarket business by agreeing to buy $WFM. $WFM will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world. John Mackey will remain as CEO of $WFM and the headquarters will stay in Austin, Texas.
With respect to the strategic initiatives, $WFM said that the rollout of the Affinity program will end by the end of FY17 and it would have rolled out the category management completely throughout the company by the end of FY18. Savings from the category management will be invested in price. $WFM expects lower prices to increase the transactions.
For FY17, $WFM expects sales to grow 1% or greater, and diluted EPS to be $1.30 or greater. The company estimates to open 30 new stores, including up to 7 relocations and three 365 stores. So far in 3Q17, $WFM opened 3 stores, including one Whole Foods Market 365 store and targets to open 3 additional stores, including one relocation, during 3Q17.
By the end of FY18, $WFM eyes for returning to positive comps and earnings growth. Based on the execution of new and accelerated initiatives, the company expects to achieve sales of over $18Bil and comparable store sales growth of greater than 2%. Also, $WFM estimates to realize an additional cost savings of $300MM by the end of FY2020.
As part of the strategic initiatives, $WFM plans to accelerate the rollout of Affinity program to all U.S. stores by the end of calendar year 2017. The company aims to restructure the purchasing program by the end of calendar year 2017 and implement category management across all U.S. stores by the end of calendar year 2018.
$WFM reported a 30% drop in 2Q17 profit, hurt by a charge of $30MM or $0.06 per diluted share, related to the previously-announced store and facility closures. Net income dropped to $99MM or $0.31 per share from $142MM or $0.44 per share in the prior year quarter. Revenue inched up 1.1% to $3.74Bil. Adjusted EPS stood at $0.37.
$WFM appointed Keith Manbeck as EVP and CFO, effective May 17, 2017. Manbeck most recently serving as SVP of Digital Finance, Strategy Management and Business Transformation at $KSS since 2014. As earlier announced, Glenda Flanagan will retire as CFO, coincident with Manbeck’s appointment. Flanagan will continue to serve in senior advisor capacity.
$WFM said the planned store closures for 2Q17 will help boost the profitability, increase EBITDA and increase comps. Of those store closure, some of the stores are smaller and older, some of them have negative EBITDA, and leases of some stores are about to expire, added the company.
During 1Q17, $WFM produced $284MM in cash flow from operations, invested $245MM in capital expenditures, and returned $43MM to shareholders through dividends and share repurchases. The company ended the quarter with $1.1Bil of total debt and $1.2Bil of total available capital.
$WFM kicked off 2017 with "Eat Real Food" brand campaign, which targets core customers with its 'Eating well and living well' theme. While the campaign has been on air for just a short time, there are early indicators that show positive trends on ad recall and purchase intent, said the company.