Whole Foods Announces 20% Dividend Increase on 16% EPS Growth

Capping off what its co-CEO called the best fiscal year in the company's history, Whole Foods Market (NASDAQ: WFM  ) announced a 20% dividend increase and a new buyback authorization today, during its Q4 and fiscal 2013 earnings report.

For the fourth quarter, which ended Sept. 29, sales rose 11% and diluted earnings per share grew to $0.32, a 16% gain. Comparable-store sales were up 5.9% over the same period last year. (Last year's fourth quarter had 13 weeks and this year's had 12, so all measurements are on a comparable 12-week basis.)

The company also said its gross profit increased by 37 basis points to 35.6%, largely because of lower cost of goods sold.

Sales for the total year were $12.9 billion, a 13% jump over fiscal 2012. Net income, representing 4.3% of total sales, came in at $551 million. EPS of $1.47 represented a 19% increase over 2012.

The dividend will rise from $0.10 to $0.12 per share, and the board of directors authorized $500 million in share repurchases, which stands in addition to the company's existing $300 million authorization.

"We reported record fourth-quarter operating results, which contributed to the best fiscal-year performance in our company's 35-year history," said co-founder and co-CEO John Mackey. "For the last four years, we have increased our new store openings while producing improvements in operating margin and higher returns on invested capital, and we expect these trends to continue in fiscal year 2014."

However, based on the first five weeks of Q1 2014, Whole Foods did lower its full-year guidance. Sales growth expectations were reined in from a range of 12%-14% to a ranger of 11%-13%, and the company also lowered its EPS guidance from a range of $1.69-$1.72 to a range of $1.65-$1.69.


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