We went through and collected over a 100 of the best posts John Mackey has made from 1999-2007 on Yahoo Message Boards since he began posting anonymously under the name of rahobed:
The collected works of John Mackay, CEO of WFMI:
stock options
13-Jan-99 04:16 pm
There actually has been very little insider selling at Whole Foods the last several months. When the stock fell a couple of months ago down to $32 several executives exercised options at the low price because this minimizes their alternative minimum taxes. Exercising options, however, is not the same as selling them. Last executive to sell any stock at this company appears to be Richard Cundiff who did it last August--probably for personal reasons.
Earnings were right on the money.
16-Feb-99 07:32 pm
According to First Call consensus estimates were $.47 a share so WFMI was right on the money--not $.03 short as WILL2WIN2 indicated. Concerning comps. WFMI reported 6.4% comps for the first 15 weeks of the quarter, so they must have had a soft 16th week to bring it down to 6.2%. In the conference call they also indicated that comps would be higher in q2, q3, and q4 than in q1.
first quarter comps
17-Feb-99 07:39 pm
Everyone is making a big deal out of WFMI's 6.2% comps for 16 weeks instead of 6.4% that they reported for 15 weeks. Consider the following facts:
1. 6.2% comps are the highest comps for public food retailers--twice as high as Oats at 3% and 4 times higher than the average public supermarket company.
2. That 6.2% comps compares against 14.4% comps in the first quarter
of 1998--a very tough comparison and about 10% compounded annually for the last 2 years.
3. The 16th week of the quarter for WFMI correlates with terrible weather in the Midwest. My sources indicate that stores in Chicago and Detroit were closed for 1 day in the 16th week--that would explain the weak comps for week 16.
4. WFMI management gave guidance on the conference call that comps would be incrementally rising each quarter for the remainder of the year--this will keep WFMI comps at the very top of the food retailing
universe.
I don't understand the problem?
WFMI's major growth still lies ahead.
18-Feb-99 12:21 pm
Z2Y4X6 -- you indicate your believe that WFMI has already experienced its major growth and is merely a specialty store which sells mostly knick-knacks and doesn't appeal to people buying "real groceries". How do you explain the following facts:
1. WFMI has 32 announced stores in development--by far the fastest rate of
growth of new store openings in their history.
2. WFMI has the highest comps in the public food retailing universe. If supermarkets are such strong competition to WFMI why are their comps so strong? Why aren't they negative as supermarkets steal their customers? WFMI has faced aggressive supermarket competition since its very beginning and yet WFMI continues to gain market share at the expense of supermarkets in every market they are in! It is the supermarkets who haven't figured out a successful way to compete with WFMI, not WFMI who can't compete with them.
3. WFMI has the highest sales per square foot in the public food retailing universe by a wide margin--$680 a foot. How is this possible if they don't appeal to people who buy "real groceries"?
Honesty Policy reply
18-Feb-99 04:40 pm
Calling me names doesn't refute my arguments.
1. Why should WFMI lower their margins to sell more product? As I stated before they have the highest sales per square ft. in the public food retailing universe. Their sales are exceptionally high already, they don't need to lower their margins.
2. The Central Market opening in South Austin will be 4 miles from their store at 6th and Lamar, whereas the first Central Market is only 2 miles away. I doubt it will affect WFMI very much at all. As it stands now WFMI in Austin does very well despite the presence of Central Market(I live in Austin and shop both WFMI stores in this market and have for many years).
3. Why shouldn't WFMI build more stores? They have the highest sales per sq. ft., the highest comps., and one of the highest net margin percentages in the food retailing universe? They've never had to close an unsuccessful store in their history.
I see you don't care much for the company. Why are you on this bulletin board if you dislike the company so much? What is your motivation?
Reply to z2y4X6
18-Feb-99 05:14 pm
1. "In the food industry, history shows that rapid expansion does not always correlate to major growth in earnings". It has for WFMI. On page 13 of the 1998 WFMI Annual Report the company reports its sales and earnings growth since 1991. In 1991 the company had $92.5 million in sales and $1.6 million in earnings. In 1998 they had sales of $1.4 billion and earnings of $45.4 million. This is a 7 year compound annual growth rate of 47% in sales and 61% in earnings. This is incredibly rapid growth for a food retailer in sales and even better in earnings! Who has done better than this among public food retailers?
2. Who has WFMI's profit come at the expense of if not from other supermarkets? They are certainly a food retailing company. They have publicly stated that more than 50% of their sales come from perishable food products alone--not including non-perishable grocery food products. In fact WFMI sells more perishable food as a percentage of sales than probably any other public food retailer except for Harry's out of Atlanta.
3. In your previous post you argued that WFMI didn't have a sustainable business design because supermarkets were now carrying their products so customers had little reason to continue to patronize WFMI. In your most recent post you shift positions by arguing that the reason WFMI has high sales per sq. ft. is that they sell many high priced specialty items that Safeway doesn't sell. Which is it? Does WFMI have competition from supermarkets or not? If they do then how do you explain their high sales per sq. ft. and high sales comps? If they don't then who is going to stop them from growing their obviously very successful concept?
4. WFMI has been in business for over 18 years. They have had very strong sales growth for all 18 years in a variety of economic climates. We can always argue whether or not in a serious economic downturn they will continue to be as successful. Maybe they will and maybe they won't. So what? Our economy has a long-term bias towards growth and prosperity. WFMI will continue to ride the long-term prosperity growth trend toward increased success even if a
temporary recession happens.
5. WFMI is much more than a high priced specialty retailer as you argue. I believe this greatly misunderstands the significant segment of our society (5% to 10% of the adult population) who is committed to a natural/organic foods lifestyle. There are many of us who do most of our shopping in natural food supermarkets such as Whole Foods Market or Wild Oats. We don't think of the stores as specialty food stores at all but as supermarkets that are in tune with our own dedication to healthy living. We certainly won't abandon stores like Whole Foods because the economy turns down. On the contrary we will probably buy more from them and eat out less.
reply to Will2Win
18-Feb-99 07:21 pm
You don't address my argument that it is really irrelevant whether WFMI does poorly in a downturn or not since the long-term trend in our economy is towards growth and prosperity. That is the normal condition. If the economy turns south for a while then I'm sure WFMI will be somewhat affected. So what? Over the long-term it won't make any difference.
In the conference call the management did address the labor issue and says that it has returned to normal levels. Also labor cost overruns (including workers compensation charges) were only 47 basis points of the 112 basis points. Amrion, Y2K, Wholefood.com and infrastructure buildup were also listed as part of the 112 basis point overrun.
1. Amrion was short by $500,000 according to management. This is alarming but consistent with the downturn other supplement manufacturers have been reporting the last couple of quarters. While not insignificant, it appears that Amrion's earnings are only about 15% of the total company's earnings. The downturn at Amrion will likely be a temporary cyclical thing and as WFMI brings those 32 new stores on-line the private label sales in supplements that Amrion manufactures will likely lift this boat.
2. Y2K is a one year expense that won't be a factor in 2000.
3. Wholefoods.com is a negative expense for now, but I doubt management would be investing in this business unless they believe that Wholefoods.com will eventually be profitable for them.
4. Infrastructure buildup seems necessary investment in light of the rapid rollout of new stores planned for the next couple of years. Management indicated in the call that G&A expense would decline as a percentage of sales as the new stores come on line.
However, I do agree with you that the market will take a wait and see attitude until WFMI begins to report rising earnings once again. Missing a quarter destroys confidence and management will need to demonstrate that managing a $1.5+ billion company is not beyond their competence. They will need to get earnings back on track.
Where I disagree with many recent posts on this board is about the fundamentals of the business. They seem very strong to me and getting stronger. If management begins to deliver rising earnings again the stock will rise along with the earnings. If/when they deliver those rising earnings again we will likely see p.e. multiple expansion since the company is undervalued versus its historical record, its future prospects, and its peer group.
Make good arguments
18-Feb-99 07:26 pm
Calling people idiots isn't an argument and won't convince anybody of your ideas. Why are you on this board if you think WFMI management are a bunch of idiots? Don't you have anything better to do with your time?
OATS
5-May-99 03:23 pm
Stud Stallion,
Last week OATS announced a $10.9 million writeoff for the closure of stores--Tempe, Arizona and Buffalo Grove, IL.. These stores failed in direct competition with WFMI stores nearby. They didn't come close to beating earnings estimates, but lost a great deal of money instead. So far the market has overlooked this because people are excited about their Nature's acquisition.
Oats closing stores.
6-May-99 01:30 pm
stud stallion2,Closing stores as Oats did as a result of failed competition with WFMI is hardly a non-recurring cost like merger expenses are. The stores that were closed were part of the company's core operations--sales and losses here are operating losses--not non-recurring expenses. Oats has closed several failed stores over its lifetime, so it is not unreasonable to expect future closings as well. The $10.9 million writeoff is equal to about 60% of their entire operating profits for 1998. Oats has spun it a different way of course, but that doesn't change the basic reality. They missed their first quarter badly.
Whole Foods Cash on Cash Returns
23-May-99 12:28 pm
Hedge,You speak with great authority about Whole Foods store unit cash-on-cash returns. It seems to be your major criticism of the company and the foundation of many of your other comments. What is your source of information about the cash-on-cash returns of Whole Foods? The company has publicly stated that it has a 30% cash-on-cash return hurdle rate for new stores by the 3rd year. By the 7th or 8th year of existence the company's stores are likely to do far better than this considering how strong Whole Foods' ongoing comp. sales are. Also during the last conference call the company stated that it had never had to close a failed store in its entire history! It may be true that Whole Foods invests a lot of capital on its stores but this doesn't necessarily mean that it has poor cash returns. Considering how high the company's sales per sq. ft. are (best in the public food retailing universe) and how strong their comps. are (again--the best in the public food retailing universe) implies that the company has a robust and profitable cash-on-cash return strategy contrary to your opinions. In addition, the company is apparently making a major commitment to EVA which will likely upgrade their capital productivity over time.
Besides Amrion, what other acquisitions do you think the company made where it overpaid? Why do you think so? What is the basis of your opinions? Bread & Circus, Mrs. Gooch's, and Fresh Fields have been the 3 major retail acquisitions WFMI has made and all have been key strategic acquisitions which eliminated powerful competitors and gave the company important geographical strongholds for further expansion in key markets.
Cash-On-Cash returns estimates.
24-May-99 07:56 pm
Here are my thoughts on cash-on-cash returns based on the public information about the company that I have. The 1998 Annual Report says that sales were $15.2 million per store and that the stores averaged 24,000 sq. ft. In the most recent press release/conference call the company said average store sales were at $313,000 per week which would raise annual sales to $16.28 million and that net profit percentage for the stores was 9.8%. The unknown is the actual cost per sq. ft. to build the store. I'm not aware that Whole Foods has publicly announced this number. Below is a chart with 3 different costs per sq. ft. and what cash-on-cash returns are estimated to be for each of them:
Construction Cost $150 sq.ft $175 sq.ft $200 sq.ft
Square Footage 24,000 24,000 24,000
Cap. Expenditures $3.6M $4.2M $4.8M
Sales per store $16.28M $16.28M $16.28M
Net Profit % 9.8% 9.8% 9.8%
Pre-Tax Net Profit $1.6M $1.6M $1.6M
After-Tax N. Proft $.96M $.96M $.96M
Depreciation $360K $420K $480K
Pre-Tax Cash Flow $1.96M $2.02M $2.08M
P.T. Cash-On-Cash R. 54.4% 48.0% 43.3%
After-Tax Cash Flow $1.32M $1.38M $1.44M
P.T. Cash-On-Cash R. 36.67% 32.86% 30.0%
Depreciation is estimated to be over 10 years for equipment and leasehold improvements. In reality equipment is probably quicker and leasehold improvements are longer--average 10 years. Tax rates are estimated to be 40%.As you can see by my calculations the cash-on-cash returns for Whole Foods Market appear to be awesome! Far above most other public retailers in any sector. The fact that the company has over 30 stores in development is a very positive thing for future cash-on-cash returns and for earnings per share growth. I also don't agree with you that the company already has located in all the best sites. I believe that the market is growing very fast and that Whole Foods will have to go full tilt to just keep up with it. I also think you underestimate the importance of Whole Foods strong comps. In valuing the company. Strong comps. means compounding earnings in existing stores and competitive success in gaining market share. The company has had very strong comps.--average of 8%--over the last 7 years. Their comp. performance has been sustained over quite a long-period of time.
Amrion appears to be a problem for the company. No doubt they overpaid for a business that appears to be in decline. However, while 10% of operating profits is not insignificant, which is what Amrion contributes now, that percentage will continue to become less important as the retail store base continues to grow. I'm betting that the strong retail growth will more than compensate for the decline in Amrion. Time will tell.
By the way, I appreciate your intelligent and non-ego based comments. You don't attack personally and I really appreciate that about you, as I'm sure many other people do as well.
Harry's
2-Jun-99 03:58 pm
EatatHaRYs,If Whole Foods acquired Harry's do you think they should keep the Harry's name or change it to Whole Foods Market? How strong is the brand name/goodwill in Atlanta for this company?
Which facts are you talking about?
4-Jun-99 05:33 pm
grrrrrrrrrrrrrrness,
Your last post talks alot about the facts but I question yours:
1. Where/when has Mackey ever said that it isn't possible to run a profitable deli? I've never seen that anywhere. What is your source?
2. Same store sales in 1998 were 11.3% and in the second quarter of 1999 were 8.2%, up from 6.2% in the first quarter. All these same store sales are the highest in the public food retailing universe. Name a company with better same store sales!
3. WFMI's after tax net profits are right at 3%, one of the highest profit rates in the food retailing universe.
4. Supermarket gross margins are from 25% to 30% on average. Nobody operates at 9% as you indicate.
5. What is your evidence that the company overpaid for Amrion & Merchant of Vino? How do you figure this?
Why WFMI stock is dropping.
17-Aug-99 07:44 pm
The real reason WFMI stock price has dropped so much the last few weeks after a strong 3rd quarter announcement, is due to the comments Mackey made on the conference call about a "more aggressive internet strategy" and a promise to hold another conference call in 6 weeks to give more details. The market is worried that the more aggressive internet strategy is going to hurt earnings and the shorts are piling on. This coming conference call will likely have a major impact on the stock price. If the market likes the strategy outlined on the call the stock is likely to trade up strongly. If they don't like it the stock may show further weakness. We will just have to wait and see what happens on the call.
Unions
31-Aug-99 03:03 pm
I have never found ex-employees to be the most reliable source of information about working conditions anywhere. There are always unhappy former employees from every company with an axe to grind about their former employer. Often times these unhappy employees were passed over for promotions and leave the company with a bad attitude (many times they are passed over in the first place because they have poor attitudes!). 4 questions for jp444:
1. If the pay at Whole Foods Market was so lousy why did you begin employment there in the first place? I assume you went to work for the company voluntarily and accepted the rate of pay they offered you. Why did you choose to do so if you believed the pay scale to be unfair?
2. If you dislike the company so much why do you read this bulletin board? I would think you have better things to do with your time? Perhaps not.
3. A more objective observer--Fortune Magazine--named Whole Foods Market one of the top 100 companies to work for in the United States the last 2 years. How do you explain this?
4. Almost every employee at Whole Foods Market I've ever talked to over the years (a considerable number) has said that they love the company. Many told me that it was the best job they had ever had! Why do you believe their experience is so different from your own
Future Locations for WFMI
26-Oct-99 04:55 pm
Whole Foods Market hasn't come close to filling out all the best locations in the United States. For one thing they have 30 sites in development in markets all around the U.S.. This alone will push the store count up to 130. How about the following undeveloped major markets for Whole Foods to open in: New York, Seattle, Portland, Oregon, Portland, Maine, Pittsburg, Cincinatti, Cleveland, Columbus, Charleston, Charlotte, St. Louis, Kansas City, Phoenix, Tucson, Denver, Albuquerque, Las Vegas, Salt Lake City, Minneapolis, Tampa, Jacksonville, Little Rock, Birmingham, Lexington, Louisville, Tulsa, Memphis, Nashville--the list goes on and on and on. It is ridiculous to believe that Whole Foods Market is running out of sites! Possibly the only market they are coming close to saturating is the Washington D.C. market where they have 11 stores open and 2 more in development. Almost every market they currently are in--including Dallas--could support several more stores. The company has publicly announced its goal of 200 stores by 2004 and has also said that it believes the market can currently support up to 500 total Whole Foods Markets. Its an open question whether the company can execute its expansion plan, but the potential is certainly there.
Store Locations
28-Oct-99 02:46 pm
tofu hotdog--You miss my point. I listed markets that Whole Foods Market had not yet entered to demonstrate that they are not close to saturating the country with stores. I also stated that they have not yet saturated any of their existing markets, except for Possibly
Washington D.C.. Almost every other large metro market Whole Foods is currently in can support several more stores. Which cannot? 200 to 300 stores will not be difficult for this company to operate successfully, which implies a $4 billion to $6 billion in sales company.
Assuming they maintain their net profit margin of about 3% this implies net profit of $120 million to $180 million or $4 to $6 per share. At 20 times earnings this implies an eventual stock price of $80 to $120. Of course higher net margins or a higher P.E. ratio would mean a higher stock price (as would the converse of course).
How are WFMI's hands tied?
29-Oct-99 05:54 pm
How are WFMI's hands tied Will2Win2? They have plenty of cash for acquisitions. I live in Austin and the Sun Harvest stores aren't any good and I'm sure Whole Foods wasn't interested in these stores. It appears to me that OATS continues to buy weak and also-ran stores just to drive their top line growth. Someday this strategy will blow up on them. Also what problems does WFMI have? They missed the first quarter but made the estimates for 2 and 3 so it would appear that earnings are back on track. No pre-announcement of missed earnings has occured concerning quarter 4 which will be announced after the market closes on Nov. 16. Their comps. appear to be very strong. What problems are you talking about? The stock seems to be moving up again as the market is finally beginning to realize that WFMI has solved its problems and has strong growth ahead for 2000.
Will2Win2
1-Nov-99 05:20 pm
Yes WFMI missed the first quarter. That is old news. They made the second and third quarters and it is probable that they will make the 4th quarter numbers as well. They are hitting these targets despite Y2K costs and heavy investment in Wholefoods.com. Their most recent conference call explained their internet strategy in detail--they seem very interested in it! The 3.9% growth rate is explained by the weak first quarter and Wholefoods.com losses. Next year's core retail earnings growth rate is pegged at 25%. The investment in the internet business is slowing the overall growth rate, but the core business is obviously very strong. WFMI is promising to take the internet business public ASAP so the core retail business will no longer be affected by it and will receive the valuation that it deserves. Hopefully the internet business will receive an internet valuation as well. Right now at Whole Foods 1 + 1 = less than 1. After the spinoff it will more likely be 1 + 1 = 3. You see problems. I see a good business strategy. Time will tell which of us is right
Three Quarters Foods
1-Nov-99 05:29 pm
My argument is based on the next 5 years. WFMI currently has 100 stores and probably has a run rate on those stores of about $1.7 billion at a 3% net margin. The company has stated it plans to double the number of stores in 5 years to 200 stores. Considering the company's consistent comp. growth of 8% it is not unreasonable to expect the average store to be doing about $20 million in sales.
$20 million X 200 stores = $4 billion.
$4 billion X 3% = $120 million in net profits. $120 million divided by 28 million shares = $4.28 per share.
$4.28 X p.e. of 20 = $85. $4.28 X p.e. of 25 = $107 a share.
wooglin kai
2-Nov-99 02:30 pm
Wooglin kai,
I don't believe you are typical of most of Whole Foods customers or at least most of their sales volume. Most of this company's business is done with customers who are committed to a natural food lifestyle--meaning they seldom or never shop at mainstream supermarkets. Supermarkets have had natural foods for years, but Whole Foods keeps gaining marketshare at their expense. Whole Foods is showing no slow down in comp. sales growth--it has averaged 8% for the past 7 years and is doing so again this year. If the supermarkets were really a threat these comps. would begin to slow down. There is no indication that they are.
Supermarkets with Wild Harvest sections actually introduce many customers to natural foods and as they get more serious about them they tend to migrate to the category killer--Whole Foods Market.
Tofu hotdog
9-Nov-99 03:56 pm
WFMI is currently producing about $120 million in operating cash flow. This company is very close to being self-funding for its future growth, even at the rate of 20 new stores per year. Within a year or 2 at most, WFMI's operating cash flow will outstrip its growth rate and debt will begin to decrease--not increase. Future interest payments are heading down for this company--not up as you indicate. As interest payments decline net earnings will grow. WFMI's net margins of 3% are therefore likely headed up--this has been the trend for several years now. My projections on stock price were therefore conservative.
Concerning WFMI's return on total capital, it is currently in low double digits, but steadily heading upward. The rapid growth in new stores temporarily hurts return on capital because it takes a couple of years for the new stores to ramp up. WFMI has publicly stated that their average return on capital for a mature store (3 years old) is over 30%. The economic model for this company is excellent!
Tofu Hotdog
9-Nov-99 04:39 pm
Well the operating cash flow comes from their financial statements. If you believe that WFMI management is lying about their store operating returns then I won't be able to persuade you. Perhaps success over time will.
Stock is up and posts are down.
9-Dec-99 04:23 pm
It is curious how the number of posts on this board dries up when the stock is going up and the company is doing well. I think it reflects the number of shorts who work this bulletin board with rumors, misleading statements, and outright lies to try to drive the stock down. I wonder if most of them are covering their shorts with the stock's recent rise or whether they are just lying low for a while? WFMI has a huge short position on the stock. Some of these shorts must be getting squeezed at this point.
natfoodbud
11-Jan-00 01:10 pm
natfoodbug,I don't believe you know what you are talking about on this issue concerning GMO's and Whole Foods Private Label. WFMI has been highly innovative in their private label for a number of years. The great majority of products under the Whole Foods label are organic already so they don't have GMO's. Probably the rest of the products lack GMO's as well, but will require manufacturer's certifications and testing before Whole Foods will claim them to be GMO free.
whtmewrry 99
19-Jan-00 01:14 pm
whtmewrry 99,You might want to do a little basic research before popping off your mouth. Here are the current valuations of various supermarket companies and Whole Foods Market:Safeway--PE ratio 20.52
Kroger--PE ratio 17.31
Albertson's--PE ratio 26.06
Hannaford Brothers--PE ratio 30.76
Whole Foods
Market--PE ratio 30.40
Admittedly Hannaford Brothers PE ratio is a few basis points higher than WFMI, but that is because the company is being sold to Delhaize America and has a control premium built into its current price. Otherwise WFMI has a substantially higher PE ratio than just about every other food retailer in the United States!
Contrary to your argument it appears that WFMI is trading at a premium to the market--not a discount. Does Mackey get credit for this premium for being a brilliant CEO??!! Why else is the PE ratio so high for this company?
For WFMI to be trading at $70 a share as you think it should be, it would need a PE ratio of over 50. How many retailers out there are trading on a PE ratio of 50+?
According to the company's recent announcement WholePeople.com's now off of WFMI's books and will no longer dilute earnings per share. I look for this stock to show good appreciation over the next few quarters, as the company executes it's aggressive retail store growth plan. If you are short this stock you would be well advised to
cover!
Homercles
19-Jan-00 04:37 pm
Because OATS took a $10.9 million writeoff for failed stores (in competition with WFMI) they closed down in 1999 it is hard to get a meaningful PE comparison for them. If you add back those writeoffs (as the Wallstreet Journal does) then OATS appears to have a lower PE ratio than WFMI. If you subtract them (therefore lowering the earnings) it appears that they have a higher PE ratio. Once they anniversary these writeoffs the comaparison between the 2 companies will be more meaningful.
With all due respect whtmewrry 99,
19-Jan-00 07:07 pm
It is easy to say that WFMI should be worth more than it is. Personally I believe in the long term value of the company (I'm long on the stock)and believe we will see good appreciation over the long-term (Please note that WFMI went public almost exactly 8 years ago at an IPO price of $8.50--split adjusted. The stock has had a CAGR of 23.83% per year for the last 8 years. It has done very well, not poorly, as you seem to believe!)Moreover, you stated in your previous message that the company was valued at a discount to its peers in the food retailing industry. This simply isn't true! My previous message showed that it was trading at a premium PE ratio to almost every other food retailer (Hannaford being an exception because it is being sold). Your new message states that it should probably be valued at 1.2 times sales. Perhaps it should. I wish it were. However, it is definitely not trading at a discount to supermarket companies on a price to sales ratio as the chart below indicates:
Safeway--Mkt Cap $18.4B Sales $27.3B P/S 67%
Kroger--Mkt Cap $14.9B Sales $45.8B P/S 32%
Albertsons--Mkt Cap $13.9B Sales $35.6B P/S 39%
Hannaford--Mkt Cap $2.98B Sales $3.29B P/S 90%
OATS--Mkt Cap $373M Sales $478M P/S 78%
WFMI--Mkt Cap
$1.25B Sales $1.6B P/S 78%
Only Hannaford trades at a higher Price to Sales ratio than WFMI and it does so only because a control premium of 30+% is being paid to the company. OATS and WFMI currently have the same Price to Sales ratio of 78%. It is obvious that WFMI is trading at a price premium to almost all other food retailers--both on a price to sales basis and a price to earnings ratio. Why can't you see this? The facts are right there in front of you!
Your final point about WFMI having higher value if the management of Safeway, Costco, or Wal-Mart were running the company is ludicrous! Safeway is trading at a discount to WFMI. Your point that WFMI has higher sales per sq. ft and higher comp. sales speaks to the superiority of WFMI management not its inferiority. They are producing better numbers than other supermarkets are! Doesn't this imply--better not inferior--management?
Since WFMI trades at a premium valuation relative to Safeway (and other supermarket companies) it is reasonable to speculate that the investment community recognizes this. Concerning the management of Wal-Mart & Costco--I daresay WFMI may have a higher valuation if these management teams were running the company! So what! I don't think they are available to WFMI to hire!! Perhaps you can line them up to take over! If you can't get David Glass from Wal-Mart maybe you could get Bill Gates or Jack Welch as CEO. I'm sure they could do a better job than the WFMI management team does.
whtmewrry 99-You're missing my point.
24-Jan-00 02:12 pm
It is easy to say that WFMI is undervalued and that management is incompetent but you have to back it up with some facts. My previous e-mails have given statistical evidence that WFMI not only doesn't trade at a discount to its peers but trades at a premium. You contradict yourself when you say on the one hand that management is incompetent and on the other hand that the company generates sales growth, same store sales, sales per sq. ft., and net margins significantly above other food retailers. Since WFMI does outperform its peers this is evidence of management superiority, not inferiority as you assert. You ignore the fact that WFMI has increased its share price since its IPO 8 years ago at a CAGR of 23% (if you had bought at the IPO price you would now have a 500%+ gain). WFMI has not overpromised and underdelivered by any objective standard of measurement as you claim. Concerning the investment in American Whole Health, time will tell whether this was a smart investment or not. It doesn't seem to me very likely that you know very much about this privately held company to pass judgement on this investment. If you dislike the management of the company so much why do you own the stock? Mackey has been the CEO of the company since its beginning over 20 years ago and he seems unlikely to be leaving anytime soon. No one is forcing you to own the stock. No doubt you could probably manage the company better than current management. Why don't you go into competition with WFMI and test your management theories in the marketplace?
shtmewrry 99,
25-Jan-00 02:23 pm
You keep saying the stock is discounted in terms of where it should be but you continue to offer no evidence that this is the case. I have proven that it is not discounted relative to other food retailers (nor is it discounted relative to other retailers). This company trades at a premium--this is what the facts clearly state. Your opinions therefore remain just that--your opinions. You are entitled to believe whatever you want to believe. However, if you expect to convince anyone else that your opinions are valid then you must produce evidence and facts. You keep saying that the CEO is an idiot without proper focus, yet he is the one who built the company from 0 stores to 104 stores with a market capitalization of $1.2 billion. You refuse to address the fact that the company's stock has created a 23% CAGR for 8 years now. I know it may seem unbelievable to you, but there is some chance that the leadership of the company knows what it is doing and that you don't.
whtmewrry 99, baby--
25-Jan-00 03:23 pm
As your other postings indicate--you are the one who constantly speaks without checking the facts! Here are the facts: Mackey never took over for Peter Roy. Mackey opened the first Whole Foods Market back in 1980 and has been the CEO for 20 years. Whole Foods bought Peter Roy's company in New Orleans in 1988. Roy was promoted to President in 1993 and reported to the CEO, Mackey, for 5 years until he left the company at the end of 1998. At that time WFMI was trading at right around $43 a share--about the same as it is right now (the stock is flat since Roy left). 1999 was not a great year for the company and the lack of growth in the stock price reflects this. The WFMI Board has obviously tolerated Mackey for 20 years now. I expect they will likely tolerate him another 20 years as well since he is only in his middle 40s. Mackey may very well be the arrogant jerk you seem to think he is. However, he has successfully built Whole Foods Market from scratch as the CEO of the company for 20 years. If you disrespect the guy so much you should sell your stock.
whtmewrry 99
25-Jan-00 06:19 pm
You still don't provide any facts to your opinions. No matter. Who knows what will happen to Whole Foods over the next 20 years? However, I wouldn't hold onto your stock because you are hoping Mackey is going to get canned anytime soon. He's been in charge for 20 years. I expect he will outlast you.
whtmewrry 99
26-Jan-00 02:26 pm
No facts and no rational arguments to support your biased opinions. Not once have you refuted any of the facts I've given to support my own opinions. You are now reduced to personal attacks and attempts at humor at my expense. Whatever...I'm withdrawing from this dialogue as a waste of everyone's time. Good luck to you whtmewrry 99! I'm long on Whole Foods and respect what their management has accomplished. Time will tell which of us is right about the company.
Hedge you are understating WFMI CAGR
5-Feb-00 07:24 pm
You keep stating that WFMI has only returned 17% over the last 8 years. This is inaccurate. WFMI went public 8 years ago at $8.5 per share split adjusted. This calculates at a 23% CAGR in share value (529% total growth) over the 8 year period. This is a superior return to over 80% of other public retailing companies. You are free to put down WFMI all you want to--after all you are short on the stock. However, you should get your facts straight on the returns this stock has generated over the last 8 years.
Hedge--let's get the facts straight
7-Feb-00 10:42 am
musumbeah
18-Feb-00 04:03 pm
Back in 1996 WFMI was trading at 100 times earnings. The stock was way, way ahead of itself. It got bid way up because of the Fresh Fields merger. The company has since "grown" into its current stock price. With the recent sell off it is becoming an extremely good value once again. If you look back to its prices before the Fresh Field's acquisition the stock was trading below $20 a share. As little as 6 years ago the stock fell as low as $9 a share. The company remains a good company with good growth prospects. It is currently undervalued in my opinion and is therefore a good buy. My advice--buy the stock on this dip and hold for the next 5 years. You'll probably triple your money if you buy now and stay the course through thick and thin.
Hedge
22-Feb-00 01:29 pm
You continue to put yourself forth as an "expert" on the Natural Products Industry--that you almost bought Fresh Fields, Wild Oats, Alfalfas, etc..-- and that you know the "real inside story" about Amrion. Why make such claims if you never back them up with any evidence or facts? Do you just expect people to agree with you because you claim to be an expert with inside information about the industry?
Your biggest ongoing criticism of WFMI is its return on capital. Over and over and over again you claim that WFMI's store model doesn't work--that the return on capital of its stores doesn't work. I've followed this board for a long time and not once have you ever produced a shred of evidence or facts to support your position. The company claims that it produces a 30% cash-on-cash return on its new stores by their third year of operations and that it goes up from there. What evidence or facts do you have that this statement is not true?! I don't believe that you have any evidence about this at all. You criticize the business model as a loser but never back it up. Please back it up or shut up! Please forgive me if I'm unimpressed with your claims about your great knowledge about the Natural Products Industry! I'll be much more impressed if you can produce cogent arguments and facts to back up your positions.
Speaking of facts you continue to ignore all the facts about CAGR that I've stated in previous posts 3901, 3957, 3965.
Hey Cosmo
24-Feb-00 03:56 pm
Answer my post in 4017 if you are able to! I believe my analysis is correct and clearly demonstrates that Whole Foods has a very profitable and sustainable store business model.
Regarding Trader Joes--You may be right. These guys seem to do a lot volume in inexpensive stores. However, this company isn't public and I have no way of determining what their actual sales, profits, or cost of building stores are. Do you? If so, provide some evidence to back your claims.
Regarding Wild Oats--They build their stores cheaper, but you get what you pay for. These cheaply built, smaller stores do not compete well against Whole Foods' larger stores. They have a good return when their is no competition, but these returns plunge when they face strong competition from Whole Foods--witness their weak sales relative to Whole Foods in both Boulder and Santa Fe (and soon Denver as well). I've been to Santa Fe and seen for myself. I've heard that total sales for Wild Oats n that market are down from 40% to 50% (3 total stores)! OATS has told the market that their comps will be about 0% the next 2 quarters--Santa Fe is the main reason why. The Wild Oats versus Whole Foods Market competitive struggle will intensify over the next few years. From my observations about the 2 companies, OATS is trying to build larger, more upscale stores to better compete with Whole Foods (in other words spending more
money to try to be competitive--copying Whole Foods).
I've never been impressed with Wild Oats. I do not believe they have a sustainable business model when faced with strong head to head competition. Time will tell on this issue. If you are an investor in Wild Oats you may be disappointed over the next few years. I certainly do not believe that their store business model is the way to go. I believe we will see it evolve to be closer to Whole Foods--if they are able to. I doubt they are.
liberfar
28-Feb-00 03:08 pm
Point well taken. WFMI certainly has stores which are vulnerable to competitive attack much like OATS was in Boulder and Santa Fe. However, your Evanston example is a poor one. OATS attacked WFMI with a smaller store, 20,000 sq. ft. vs 35,000 for WFMI. OATS store is also called People's Market. It appears to me to that this store is similar to Trader Joe's but with perishable products such as produce, meat, and deli. I don't know whether this store hurt WFMI or not--I doubt it helped them. However, I do know that if you visit both stores today you'll find WFMI very busy and the People's Market much less so. This is a very different situation and result than Boulder/Santa Fe. WFMI now dominates in these markets that OATS once owned. In Evanston, WFMI remains the clear market leader despite the entry of People's Market.
I think it is curious that OATS opened in Evanston under a different brand and concept. What does that say about their own confidence in the core retail format when it must go head to head with WFMI? OATS also closed its failed store in Buffalo Grove (Chicago suburb) in 1999. It doesn't appear to me that they are making much of an inroad in WFMI's dominant position in the Chicago market.
liberfar
28-Feb-00 03:08 pm
Point well taken. WFMI certainly has stores which are vulnerable to competitive attack much like OATS was in Boulder and Santa Fe. However, your Evanston example is a poor one. OATS attacked WFMI with a smaller store, 20,000 sq. ft. vs 35,000 for WFMI. OATS store is also called People's Market. It appears to me to that this store is similar to Trader Joe's but with perishable products such as produce, meat, and deli. I don't know whether this store hurt WFMI or not--I doubt it helped them. However, I do know that if you visit both stores today you'll find WFMI very busy and the People's Market much less so. This is a very different situation and result than Boulder/Santa Fe. WFMI now dominates in these markets that OATS once owned. In Evanston, WFMI remains the clear market leader despite the entry of People's Market.
I think it is curious that OATS opened in Evanston under a different brand and concept. What does that say about their own confidence in the core retail format when it must go head to head with WFMI? OATS also closed its failed store in Buffalo Grove (Chicago suburb) in 1999. It doesn't appear to me that they are making much of an inroad in WFMI's dominant position in the Chicago market.
liberfar
2-Mar-00 01:23 pm
People's Market is only 20,000 sq. ft. If this store is such a success why hasn't Wild Oats opened any more? You say that "Oats' stores don't impress me, but their management does". This seems to me to be a contradiction--If OATS management was really very good wouldn't they produce good stores as well?
Also consider this: The Boulder paper recently had an article about OATS new policy of their store managers checking all their employees backpacks and bags before they can leave the store after their work is over. The justification for this "gestapo" policy is that they have an employee theft problem and that this will cut down on the problem. Such a policy is guaranteed to destroy trust with the employees of the company! Treating everyone who works for you as a criminal is not a sign of good management. One store manager in Denver who objected to the new policy and said she wouldn't do it was fired. In contrast to OATS, WFMI has been named by Fortune Magazine as one of the 100 Best Companies To Work For for 3 years in a row. One of the great myths about OATS is that they are faring well financially. This is certainly how they portray themselves to the investment community. However, a closer look reveals a different story.
Consider the following facts:
1. Just prior to their IPO Wild Oats took a significant "one time" writeoff for failed stores. This writeoff was for several millions of dollars. It is not difficult for companies to play games with writeoffs. For example a retail company can easily overaccrue estimated rental payments
for the stores they are closing. Let's say they close a store that still has 10 years of lease payments still owed at $300,000 per year. After the writeoff of $3 million for future rental payments, the retail company settles their lease obligations with a payment to the landlord of $1 million. What happens to the difference between the $3 million written off and the $1
million payment? That $2 million "gain" can now be added back to earnings.
2. 1 year ago, 4 years after their last "one time" writeoff, OATS took an additional $11 million writeoff for "closed stores & other non-performing assets". The 2 stores they wroteoff competed directly with WFMI--one in Tempe and one in the greater Chicago market. They failed in this head to head competition. OATS always claims they build their stores very cheaply. How then can 2 stores equal $11 million? Either they weren't cheap stores after all or OATS took a generous future rental writeoff.
Do we see a pattern here? Every 4 years OATS takes a big bath writeoff and sells it as a "one time event" to the market. If they overaccrue the writeoff they have "reserves" to possibly use in the future to help a weak quarter. If you add up how much profit OATS has really made over the last 5 years, including all writeoffs for failed stores, you would see that this company has overall had very low profits.
3. OATS actually missed their last reported quarter from an operating standpoint. They only made the consensus numbers by manipulating their tax rate. They still publicly deny that WFMI has hurt them very much in either Boulder or Santa Fe. Anyone who goes and looks at the stores can see the real truth. They consistently claim that when their comps fall it is due to "planned cannibalization" and hail it as a brilliant strategy--clustering their stores close together. They've told the investment community that comps in the second and third quarters will be close to zero. They deny that this is due to WFMI in Santa Fe, but is all part of their master plan, and that they will still make their earnings projections (how?--reserves?--where do these reserves come from?--pay no attention to the man behind the curtain!) You may admire this management team. I do not. I believe that eventually the market will wise up to the underlying reality of this company and it will receive the valuation it deserves. Eventually the short-term becomes the long-term.
*** GREAT ARGUMENT Hedge
22-Mar-00 06:18 pm
Sorry for my tardy reply, but I've been out of town and off the web for the last 10 days. These business models on WFMI from Dain Rauscher and H&Q are published where? I've not seen these reports and am not inclined to believe you. Why? A friend of mine recently attended the Adams Harkness Hill Investors Conference in Boston last week and saw Mackey actually make a presentation and e-mailed me his take on the company (quite positive!). According to my friend, one of Mackey's slides reported the cash-on-cash actual results for the company for its new stores. Here is what the slide reported:
Yr1-Sales $15m Cash Flow $1.15m Cash Return 18%
Yr2-Sales $18m Cash Flow $1.87m Cash Return 29%
Yr3-Sales $20.7m Cash F. $2.36m Cash Return 36%
Yr4-Sales $23.2m Cash F. $2.79m Cash Return 43%
Yr5-Sales $25.5m Cash F. $3.25m Cash Return 50%
Yr6-Sales $27.5m Cash F. $3.7m Cash Return 57%
Does this look familiar? It should. Its the same numbers that Carole Buyers gave in her published report. It appears that Buyers was reporting information that the company disclosed to her since her information squares with Mackey's. The source of your models seems dubious at best, unless you can document it. I'm faced again with the alternative of believing Buyers & Mackey or Hedge. Of course Mackey could be lying about the numbers--and risking a shareholder lawsuit. Or you could be mistaken in your claims about cash-on-cash returns.
I also believe you are very much mistaken on your assertion that WFMI has closed 20 stores in the last 5 years. What is your source of information for this? The few stores that they have closed and relocated have largely been acquired stores from Fresh Fields and other acquisitions. The company claims to have never had to close a failed store that they opened themselves in their entire history!
I don't know what percentage of Whole Foods profits are generated by just a few stores and I seriously doubt that you do either. Over the years, however, I've seen at least a couple dozen of Whole Foods stores around the United States and without exception every one of these stores was quite busy. I don't believe this company has a few great stores and many mediocre ones. What evidence do you have that this is thecase?
You have stated you are short this company and I've stated that I'm long. You've made some good short calls from a timing standpoint. However, I bought this company early on and have made a ton of money buying and holding--over 20% CAGR since the IPO 8 years ago.
I believe you are quite wrong about the economic reality of WFMI. Their stores do very high volumes and they are making a ton of money. Your short plays made sense when the company was trading at 70 times earnings as it was back 2 years ago. Shorting made sense in 1999 when WFMI's core retail business was being diluted by Y2K, Amrion decline, and Wholefoods.com startup losses. These events are all behind this company now. Your short doesn't look so smart to me now. The company's PE has normalized and they are apparently opening several high volume new stores--Seattle and Santa Fe. You may make some good market timing calls on your shorts, but eventually this company is going to burn you if you keep shorting it!
Hedge
28-Mar-00 06:41 pm
Hedge, why is it that when someone disagrees with you that you feel compelled to engage in ad hominem attacks on them? Your last post had these choice things to say about me: "rookie", naive, nimrod, "genius," dork, and simpleton. Calling me names doesn't make your arguments any more valid but they do reflect back on your own character.
Concerning H&Q & Dain Rauscher--I've read all their published research on WFMI. Bonnie Tonneson and David Garrity cover WFMI and I've read all their stuff on the company. They've never published the numbers that you are claiming they have! Unless you can point to research documents that support your claims I will continue to assume that you simply made the numbers up.
The numbers that Mackey reported at Adams Harkness Hill were based on actual historical numbers. These were not fictional numbers but actual results based on the stores they have opened in the last 6 years.In the last 5 years WFMI has relocated to larger stores only 4 stores that they actually opened themselves--the 3 original Austin stores to 2 larger stores and 1 in San Antonio. All other relocated stores were acquired stores that were relocated soon after their acquisitions occurred. WFMI was probably eliminating competition when these stores were acquired and relocated. These relocations do not detract from their store operating model.
Regarding store sales: WFMI has the highest sales per sq. ft. in the public food retailing universe--almost $700 per sq. ft. These numbers would not be possible if they only had a few good stores as you claim. Nor would it be possible for the company to report store operating profits of 9.4%. These numbers clearly indicate that the company has widespread store
success.
I own much, much more than 100 shares of WFMI stock and I've made a ton of money on it--on paper -- since I'm letting my gains compound tax-free! WFMI has produced a stock price that has increase at 23% CAGR for 8 years now. I've doubled my money just about every 3 years. I've also added to my position in the previous sell-offs when the company has traded back down to the low $30's. I'm also confident that WFMI will continue to grow its stock price by 20% on average for the next 8 years as well--although of course it will have great volatility during that time. Let me know when you cover your latest short.
Hedge
29-Mar-00 12:30 pm
At no point have I personally attacked you or called you a liar! I have, however, asked you to back up many of your statements and claims--something which you simply don't do. Your last post says--"I don't need to support my claims". You do with me (and others) if you expect to be taken seriously and not have your arguments attacked. I've read everything that David Garrity of Dain Rauscher and Bonnie Tonneson of H&Q have written about WFMI and they have never made the cash-on-cash return analysis on WFMI that you claim they have. They simply haven't done it! Are you liar? I don't know. You might be. I've not said that in the past nor am I saying it now. If you can back up your claims with supporting evidence you will have more credibility. If you cannot or will not then you should hardly be upset if some people draw their own conclusions about your integrity in these matters.
Hedge, I realize that you are very proud of yourself, your apparent Wallstreet background, and your claimed "inside" knowledge about Alfalfa's, Fresh Fields, and UNFI. I know that you see yourself as a "professional" on this Board dealing with a bunch of rank amateurs (such as myself!). You are forever name dropping about your "buddies at Stern Stewart" or PBGH for example. You seem to believe that people should basically concede all arguments to you because you are an "expert professional" who understands basic financial matters while others do not. This comes across as incredibly arrogant and pretentious. You may very well be an investment professional; you might have almost bought Fresh Fields; you might have friends at Stern Stewart. But so what!! What difference does any of that make to anyone? On a Bulletin Board such as WFMI no one really knows who anyone else is because identities are hidden. All that matters on the WFMI Board is the power of one's ideas and one's ability to make cogent arguments with supporting evidence. Since you are unable or unwilling to provide any evidence for your positions that can be critically examined by other members of this community it is difficult for myself and many others to see you as anyone but a Short Seller prepared to do or say anything to hurt WFMI's stock--regardless of what the facts about the company may be.
I believe that you are deeply wrong about WFMI's fundamental prospects. You may or may not make money shorting this company over the short-term because it has high volatility. However, if you hold your short position over the next couple of years I believe that you will regret it.
Hedge
29-Mar-00 04:24 pm
My intention is not to be "cute" but to refute your arguments, point out your inaccurate and inconsistent statements, question your logic, and in general discredit your leadership role on this bulletin board which I believe is based much more on bluster, name dropping, ad hominem attacks, and misleading statements than on any "facts" or careful reasoning about the company. It is my ongoing intention to challenge your position about WFMI at every turn when I believe that you are misleading people.
I believe that you have said many inaccurate things about WFMI. The cash-on-cash return is one of them. You don't respect Carole Buyers and you think that Mackey & the company lies about its actual store cash-on-cash returns. You claim that H&Q & Dain Rauscher produce different cash-on-cash models for the company but can produce no evidence for this position. Carole Buyers research was published and in the public domain for examination. Your "research" on the other hand cannot be authenticated or even examined--therefore it isn't research or evidence at all--just your opinions.
Where else have you misled people about WFMI? Compound Annual Growth Rates (CAGR) for the stock price. You make a big deal about WFMI no doing well for the last 2 years. This is true. However, many times on this Board you have said that WFMI has only produced a 16% return over its public life. This isn't true and I've called you on it several times. The company went public at $8.50 in January of 1992. It now sells for $44 a share. This works out to a CAGR of over 22%. Warren Buffett himself has only produced a 23% return over his investing lifetime.
Concerning the company's investments in EVA which you believe to be the "smartest decision in its history"--you are probably right. WFMI claims to have altered all their management bonus systems to be based on increases in EVA. This will help the company to increase their capital productivity and will make their already very impressive cash-on-cash operating model even more impressive.
Hedge, I'm not frustrated by "not having the same level of access" as you seem to believe that you have. I'm not frustrated at all. I'm pretty sure that I understand WFMI far better than you do and that is why I'm so confident in my attacks on your "facts" and arguments. Let us keep this dialogue going over the next couple of years and we will see who is right about WFMI and who is wrong. Let us together discover who knows more about WFMI--you or me.
I'm happy to be going on a 2 week vacation beginning tommorrow. I therefore won't be posting until my return so don't mistake my silence for agreement.
Hedge
17-Apr-00 05:17 pm
I'm back from a very restful vacation. It looks like WFMI has had very high volatility over the past couple of weeks, but that on my return the stock price is pretty much where it was when I left--$44 to $45 a share. Not bad when you consider what has been happening in the overall markets -- especially NASDAQ.We are still arguing about cash-on-cash returns. You quote Bonnie Tonnesson's launch piece in June 1999 in support of your cash-on-cash numbers. I re-read her report, and not surprisingly, her numbers support Carole Buyer's and Mackey's numbers--not yours. On page 14 of that report Bonnie has a chart for the New Store Economic Model and she lists her source as Whole Foods Market. Here is what she reports:
Yr1 Sales-$15.3M Cont. 3.4% Cash Return 10.0%
Yr2 Sales-$18.0M Cont. 6.7% Cash Return 21.7%
Yr3 Sales--$20.5M Cont. 8.9% Cash Return 34.5%
I ask again--who supports your Cash-on-Cash Return numbers? Bonnie, Carole, and Mackey all have similar numbers, apparently based on actual results. Your numbers come from who and are based on what??!
I'm happy that you are finally admitting that long-term returns for WFMI have been "just fine". Your complaint about poor short-term returns is true but completely explained by overvaluation of the stock 2 years ago when it hit its all time high of $70. It will take WFMI probably another 2 years to grow back to a $70 stock price but that will be a fair valuation at that time. Regarding short-term returns, why not consider the 50% return the stock has had from $30 a share over just the last 6 months. Even for you, Hedge, a 50% return over 6 months is probably an acceptable return!!
Just for the record--I'm very happy with my 23% CAR for WFMI over the last 8 years. My early investment in this company has increased in value over 500% during this time period!
Obviously our major disagreement is over future prospects for WFMI. I'm quite bullish on the company and you are not. Here is why I'm bullish in a nutshell:
1. The Natural Products market continues to grow over 10% every year and Organic foods over 20% every year. These trends show no signs of slowing down.
2. WFMI is the clear leader in the category with sales more than 100% larger than their nearest direct competitor Wild Oats. This leadership gives WFMI numerous competitive advantages in purchasing, marketing, real estate, and management. This is probably the main reason that WFMI has been able to increase its gross profit margins every year since it has gone public.
3. WFMI seems to be winning all direct head-to-head competitions with Wild Oats.4. The company will open 20 new stores this year which is more than twice as many as they opened the year before. Growth is not slowing down, but is accelerating.
5. According to the company new stores are posting very high sales and are achieving profitability very quickly.
6. WFMI has made a major committment to EVA to increase its productivity of capital.
7. Both Wholefoods.com and Amrion are no longer consolidated with WFMI. These 2 businesses hurt earnings in 1999.
8. WFMI has the highest same store sales increases in the public food retailing universe --about 8% and they have produced this on average for at least the last 8 years. Clearly they continue to gain market share at the expense of their competitors.
9. WFMI has the highest sales per sq. ft -- almost $700--in the public food retailing universe.
WFMI has been a great investment over the last 8 years. I believe that this will continue to be the case for the next 8 years as well. Good luck with your shorting! You have made money on the volatility of the stock. However, you could have made just as much money on the same volatility by market timing correctly through going long as well as short. Because the long-term trend of this stock will be up eventually you are going to get burned unless your market timing remains impeccable. Good luck to you!
CLICK HERE FOR PARTS II-IV of the Collected works of John Mackey
