Whole Foods, based in Austin, Texas, is facing pressure from Phoenix-based… (Associated Press )
Sprouts Farmers Market Inc. shares are gearing up to hit the public market at higher-than-expected prices a day after Whole Foods Market Inc. let down Wall Street with its earnings.
But when asked about the increasingly crowded natural and organic grocery space, Whole Foods Co-Chief Executive Walter E. Robb told rivals: “Bring it on.”
“I would just say we love competition,” he told a conference call of analysts. “I think we feel good about our chances going forward.”
Robb’s co-CEO, John P. Mackey, attributed the burgeoning field to “the nature of capitalism.”
“Success breeds competition,” he said. “And so I expect that we’ll see more competition, but again, we have first mover advantages, we are also innovating at a very rapid rate.”
Whole Foods, based in Austin, Texas, is facing pressure from Phoenix-based Sprouts, which priced its offering of 18.5 million shares at $18 a piece Wednesday, above the projected $14-to-$16-a-share range.
Celebrity products: Perfume, protein pudding and more
The natural and organic foods retailer will start trading on the Nasdaq exchange later Thursday under the ticker symbol SFM.
Fairway Group Holdings Inc., a similar chain out of New York, also priced its April offering above expectations. From that $13-a-share level, the stock price has boomed nearly 93%.
Another competitor, Wild Oats Markets Inc., says it is launching a comeback this year. A trademark application suggests that local billionaire Ron Burkle is involved through his private equity firm Yucaipa Cos.
Sprouts, which launched in 2002 in Chandler, Ariz., said in regulatory filings that it drew $2 billion in sales last year. The nation’s supermarket industry is worth $600 billion, the company said.
The grocer runs 163 small-box stores in eight states as of mid-July but says it has the potential to expand to 1,200 locations.
Whole Foods has 355 stores and plans to grow to 1,000 units in the U.S.
The chain opened down Thursday but recovered in late morning trading in New York to $55.72 a share, a 14-cent boost, or less than a percent.
The company said its revenue was up 12% to $3.1 billion for the third quarter ended July 7, slightly below analysts’ expectations.
Same-store sales rose 7.5% while net income surged 21% to $142 million, or 38 cents a share, from $117 million, or 32 cents a share.
Whole Foods raised its profit forecast for the rest of the year but trimmed the top end of its same store sales predictions to 7.3% growth from 7.5%.
Whole Foods to open downtown L.A. store in 2015
TGI Fridays in N.J. fined for swapping fine liquor for cheap booze
Trader Joe's picked as favorite grocery chain by surveyed shoppers