US retailer Whole Foods has posted higher than expected quarterly profit and upgraded its forecast for next year. The company has managed to gain more market share with its launch of a range of new products.
Shares of America’s number one organic supermarket chain increased by 8.1 percent in after hours trading.
According to Consensus Metric, same-store sales climbed up by 3.1 percent in the fourth quarter – similar to what analysts had forecast.
Investors were beginning to show concerns about the dominant Whole Foods has in the upmarket grocery sector as the company is beginning to face fierce competition from companies such as Fresh Market Inc, Farmers Market Inc, and even Kroger Co.
Whole Foods said that it will be reducing the prices of its fresh produce and other perishable products in an attempt to lose its nickname “Whole Paycheck” – because of its high prices.
For the first time the company will be running a nationwide ad campaign and launching a shopper loyalty program. Whole Foods also plans on setting up a “responsibly grown” rating system for the produce and flowers it sells – a move that will give them an edge over the competition.
Revenue increased by 9 percent to $3.25 billion and net income rose to $128 million (35 cents per share) in the quarter. It raised its dividend by one penny to 13 cents per share.
It is also working to stay ahead of rivals by launching a “responsibly grown” rating system for the produce and flowers it sells. Whole Foods already has its own ratings system for meat.
The company forecast 2015 sales growth “over 9 percent”.