Wild Oats Markets, a leading national natural and organic foods retailer, has announced a rise in sales and profits for the first quarter of fiscal 2003, ended March 29.
Net income in the first quarter of 2003 more than doubled to $1.4 million, or $0.05 per share, on first quarter sales of $236.0 million, up 1.3 per cent compared with $233.0 million in the first quarter of 2002.
The sales increase was driven by the addition of four new stores to the company's portfolio compared to the first quarter of 2002, which more than offset the sale and/or closure of four stores year-over-year.
Comparable store sales in the first quarter of 2003 were down 0.9 per cent compared to a gain of 7.3 per cent in the first quarter of 2002. The decline in comparable store sales can primarily be attributed to continued disruption related to the company's SKU reduction program which started in the fourth quarter of 2002 as the company began a transition to a new private label programme.
Comparable store sales in the first quarter of 2003 were also negatively affected by temporary disruptions to store operations related to unusually severe weather in many parts of the US, continued road construction affecting some of the company's stores and the shift of the Easter holiday into the second quarter of 2003. These factors combined had approximately a two percentage point negative impact on comparable store sales in the first quarter.
"We are pleased with our continued improvement in profitability, which is evidence that our margin enhancement strategies are working," said Perry D. Odak, president and chief executive officer.
"We expect our sales to show gradual improvement throughout the remainder of the year, as we get beyond most of the disruption related to our SKU reduction and as we roll out our new private label product line in the second half of 2003. However, disruption in some of our stores related to remodeling activity will have an adverse impact on sales through the remainder of the year."
Wild Oats Markets opened three new stores in the first quarter of 2003. Under the Wild Oats Natural Marketplace banner, the company opened new stores in Portland, Maine and Louisville, Ky. in January, and, under the Henry's Marketplace banner, the company opened its first prototype farmers market store in Costa Mesa, Calif. in February.
The company said it planned to open up to six more stores in the second half of 2003. These include Wild Oats Natural Marketplace stores in Lexington, Ky.; Franklin, Tenn.; metropolitan Salt Lake City, Utah; Denver and Colorado Springs, Colo.; as well as one Henry's Marketplace in the greater Los Angeles area. A further 20 outlets are planned for 2004.
Wild Oats Markets currently operates 101 natural food stores in 25 states and British Columbia, Canada.