Whole Foods Market saw a big decline in profit during the past year, according to financial documents the Austin-based grocery chain filed with the U.S. Securities and Exchange Commission on Friday.
Whole Foods, which was acquired by Amazon earlier this year, posted $245 million in profit for its fiscal year that ended on Sept. 24, the company said. That’s a significant drop from the $507 million in profit it reported for fiscal year 2016. The company also reported roughly 2 percent growth in sales.
While Whole Foods said its profit was affected somewhat by the sale to Amazon, the decline highlights some of the issues that have plagued the company the past few years.
Whole Foods reported $156 million in costs associated with its merger with Amazon. It also spent $82 million in relocation, store closure and lease termination costs than it did for fiscal year 2016.
In comparable store sales, an important business indicator, Whole Foods reported a 1.5 percent year-over-year decline.
The company is not expected to issue any further earnings reports.
“Our continued growth depends on our ability to increase sales in our comparable stores and open new stores,” Whole Foods said in its report. “Our comparable store sales growth could be lower than our historical average for many reasons including the impact of new and acquired stores entering into the comparable store base, the opening of new stores that cannibalize store sales in existing areas, general economic conditions, increased competition, price changes in response to competitive factors, possible supply shortages, and cycling against any year of above-average sales results.”
Whole Foods did not immediately respond Friday to messages left seeking comment.
Whole Foods reported full-year revenue of $16.03 billion, compared with revenue of $15.72 billion for fiscal 2016.
For its fiscal fourth quarter, Whole Foods reported a net loss of $55 million, compared to profit of $88 million in the same quarter the previous fiscal year. However, Whole Foods saw its sales increase more than 4 percent in the quarter, reaching $3.65 billion, up from $3.49 billion in the same quarter the previous fiscal year.
Amazon owned Whole Foods for the final month of the fiscal fourth quarter.
During its final quarterly earnings report as a public company in July, Whole Foods also reported a drop in profit and same store sales. Counting its 2017 yearly report, the grocer has had nine straight quarters of falling same store sales.
Since Amazon’s $13.7 billion purchase of Whole Foods in August, the online retailer has lowered prices on some items at Whole Foods while also beginning to sell some of its popular products such as its Echo home devices at Whole Foods stores. Amazon executives have said the moves mark only the beginning of integration between the two entities.
Whole Foods’ yearly report is also likely to have little impact on Amazon, which reported 34 percent growth in sales and stable profits during its latest earnings report on Oct. 26.
Amazon said then that Whole Foods added $1.3 billion to the company’s net sales and $21 million in operating income.
Whole foods employs 89,000 people and operates 470 stores across the U.S., Canada and the United Kingdom, the grocer said Friday.
News on Open Source is free and unlimited. Access to the rest of 512tech.com comes with an American-Statesman digital subscription, which also includes myStatesman.com and the ePaper edition. Subscribe at statesman.com/subscribe.