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Whole Foods Market Reports Third Quarter 2017 Results

AUSTIN, Texas, July 26, 2017 (GLOBE NEWSWIRE) -- Whole Foods Market, Inc. (WFM) today reported results for the 12-week third quarter ended July 2, 2017. For the quarter, total sales increased 0.6% to a record $3.7 billion, and comparable store sales decreased 1.9%. Net income was $106 million, or 2.8% of sales; diluted earnings per share were $0.33; and earnings before interest, taxes, depreciation and amortization (“EBITDA”) were $293 million, or 7.9% of sales. The Company produced operating cash flow of $277 million, free cash flow of $145 million, and returned $44 million in dividends to shareholders, ending the quarter with $1.5 billion of total available capital and $1.0 billion in total debt. Results included charges of $14 million, or $0.03 per diluted share, related to advisory fees. Excluding these charges, diluted earnings per share were $0.36. Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release.

Recent Merger Announcement
On June 16, 2017, Amazon.com and Whole Foods Market, Inc. announced a definitive merger agreement under which Amazon.com will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, including Whole Foods Market’s net debt. As such, the Company will not be updating its outlook for fiscal 2017 or longer-term targets and will not be holding a conference call to discuss the Company’s financial results for the third quarter ended July 2, 2017. Completion of the transaction is subject to approval by Whole Foods Market's shareholders, regulatory approvals and other customary closing conditions. The parties expect to close the transaction during the second half of 2017.

“For the quarter, we delivered record sales and free cash flow, and returned $44 million in dividends to our shareholders,” said John Mackey, co-founder and chief executive officer of Whole Foods Market. “Our comparable store sales improved sequentially on a one- and two-year basis in the third quarter, and that momentum has accelerated 220 basis points in the fourth quarter, resulting in positive overall comps for the first three weeks.”

Growth and Development
In the third quarter, the Company opened six stores, including one relocation. In the fourth quarter, the Company has opened two stores, and expects to open two additional Whole Foods Market stores and two Whole Foods Market 365 stores, including one relocation.

Year-to-Date Results
For the 40-week period ended July 2, 2017, total sales increased 1.3% to $12.4 billion and comparable store sales decreased 2.4%. Net income was $300 million, or 2.4% of sales; diluted earnings per share were $0.94; EBITDA was $941 million, or 7.6% of sales; and return on invested capital was 10%. The Company produced operating cash flow of $901 million, free cash flow of $393 million, and returned $132 million in capital to shareholders through dividends and share repurchases.

About Whole Foods Market
Founded in 1978 in Austin, Texas, Whole Foods Market is the leading natural and organic foods supermarket, the first national “Certified Organic” grocer, and uniquely positioned as America’s Healthiest Grocery Store™. In fiscal year 2016, the Company had sales of approximately $16 billion and currently has over 465 stores in the United States, Canada, and the United Kingdom. Whole Foods Market employs approximately 87,000 team members and has been ranked for 20 consecutive years as one of the “100 Best Companies to Work For” in America by Fortune magazine. For more information, please visit www.wholefoodsmarket.com.

Disclaimer on Forward-looking Statements
Certain statements in this press release and from time to time in other filings with the Securities and Exchange Commission, news releases, reports, and other written and oral communications made by us and our representatives, constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “continue,” “could,” “can,” “may,” “will,” “likely,” “depend,” “should,” “would,” “plan,” “predict,” “target,” and similar expressions, and include references to assumptions and relate to our future prospects, developments and business strategies. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that are based on the Company’s current assumptions and involve risks and uncertainties that may cause our actual results to be materially different from such forward-looking statements and could materially adversely affect our business, financial condition, operating results and cash flows. These risks and uncertainties include the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; the failure to obtain the approval of Whole Foods Market’s shareholders or required regulatory clearances or the failure to satisfy any of the other closing conditions to the Merger; potential disruption of management’s attention from Whole Foods Market’s ongoing business operations due to the Merger; the effect of the announcement of the Merger on the ability of Whole Foods Market to retain and hire key personnel and maintain relationships with its customers, suppliers and others with whom it does business, or on its operating results and business generally, changes in overall economic conditions that impact consumer spending, including fuel prices and housing market trends, the impact of competition and other factors which are often beyond the control of the Company, as well other risks listed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 25, 2016 and Quarterly Report on Form 10-Q for the second quarter ended April 9, 2017, and other risks and uncertainties not presently known to us or that we currently deem immaterial. We wish to caution you that you should not place undue reliance on such forward-looking statements, which speak only as of the date on which they were made. We do not undertake any obligation to update forward-looking statements.

Important Additional Information and Where to Find It
In connection with the proposed transaction, Whole Foods Market has filed with the SEC a definitive proxy statement and other documents relating to the transaction, including a form of proxy card, on July 21, 2017. The definitive proxy statement and form of proxy card have been mailed to Whole Foods...


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