Wfm presentation
- 1. COLIN PAK, SAGE REISNER, ALEX WOOD, BRIAN MEDRANO Whole Foods
- 2. Mission “Our Company mission is to promote the vitality and well- being of all individuals by supplying the highest quality, most wholesome foods available. Since the purity of our food and the health of our bodies are directly related to the purity and health of our environment, our core mission is devoted to the promotion of organically grown foods, healthy eating, and the sustainability of our entire ecosystem.”
- 3. Company Profile •Opened September 20, 1980 in Austin, Texas •Founder and Current CEO: John Mackey •largest retailer of natural and organic foods in the United States. •11th largest food retailer based on 2011 sales rankings from Progressive Grocer. •335 stores in the US, Canada, and the UK, 78 stores in development now
- 4. Organic Food •Organic Food will become more popular because: • A heightened awareness of the role that healthy eating plays in long-term wellness • Better-educated and wealthier populace whose median age is increasing each year • Increasing consumer concern over the purity and safety of food (no GMOs) • Environmental concerns and marine life sustainability
- 6. Risks • Premium prices on products o dependent on a good economy (in past performed well) • Expanding into foreign markets o Less brand recognition in Canada and UK • More competitors will offer organic products. o threaten competitive advantage
- 7. Basic Metrics Share Price 87.00 Shares Outstanding 185.33 M Market Cap 16.20 B 52 Week Range 81.39 - 101.86 Dividend 0.20 PE / Forward PE 32.98 /25.71 PEG 1.55 EPS 2.65 EV/EBITDA 12.92
- 8. Market Segmentation •One operating segment: natural and organic foods supermarket •Whole Foods tries to stay within their niche to provide their customers with the highest quality of products.
- 9. Identical Store Sales Growth
- 10. Geographic Sales Segmentation 2012 2011 2010 US 96.8% 96.9% 97.0% Canada and UK 3.2% 3.1% 3.0%
- 11. Five Year Stock Price
- 12. Competitors Publicly Traded Competitors include: • Kroger • The Fresh Market • Natural Grocers • Fairway Some private competitors include Trader Joe’s and small organic markets
- 13. Kroger • Manufactures and processes some of the food for sale in its supermarkets. • Operates 2,435 supermarket and department stores such as Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry’s, King Soopers, QFC, Ralphs and Smith’s. • Largest distributer of groceries in the United States
- 14. The Fresh Market •Specialty retailer focusing on perishable product categories, •Non-perishable product categories consist of grocery and dairy products, specialty foods, coffee and candy, and beer and wine. •Operates 113 stores in 21 states, primarily in the Southeast, Midwest and Mid-Atlantic United States.
- 15. Natural Grocers • Operates natural and organic grocery and dietary supplement stores in the US • Offers natural body care products. • operates 60 stores in 13 states.
- 16. Fairway Went public last week Similar offerings to WFM –perishable goods, non perishable, specialty goods and wines/spirits 11 stores in the tri-state area (NY,NJ,CT) Net income for 2012: -86.45M
- 17. Financial Comparison WFM TFM NGVC Stock Price 87.42 42.21 23.92 Shares Outstanding 185.33 M 407,202 22.4 M Market Cap 16.20 B 1.99B 535.85 M P/E 32.98 30.98 67.95 EV/EBITDA 12.92 13.34 22.53 Profit Margin 2.21% 4.83% 2.21%
- 18. Income Statement•Revenue: • 2012: $11,698,830,000 (+16%) • 2011: $10,107,790,000 (+11%) • 2010: $9,005,790,000 (+12%) • 2009: $8,031,620,000 •Revenue, Gross Profit, Operating Profit, and Net Income have increased over the past four years. •Diluted EPS has increased to 2.52 from 1.93 in 2011 (+31%) •Dividends: .56 dividends/share
- 19. Balance Sheet •Total Assets increased from 2011 to 2012 showing how the company has been opening stores in more locations recently. o 2011: $4,292.07 M o 2012: $5,294.22 M o 23.4% growth •Increase in treasury stock in 2012 (-28.60M)
- 20. Statement of Cash Flows Cash From Investing Activities decreased due to investing in new stores o 2011: ($450.72) M o 2012: ($1,341.35)M Increase in Investing activities by 197%
- 21. Equity Bond Analysis Over last 3 year WFM met or beat quarterly EPS expectations Q1 an Q2 of 2012 –beat Q1 by 8% and Q2 by 9% Projecting that EPS will be higher than analysts’ expectations Intrinsic Value: $93.18 with EPS growth of 21% Past 3 years annual growth rate: avg EPS growth 35%
- 23. Thesis •Whole Foods Market is a buy based on the qualitative and quantitative analysis. •Continually opening new stores in the United States •Same store sales growing since 2008 •Increasing awareness about organic food and environmental sustainability •Performs well relative to competitors and is the largest distributor of organic food is the US. •Through the EB Analysis the company is/will continue to have high growth