Finanzas: Whole Foods Market – Looking Back, Looking Forward

 

The story of Whole Foods Market is one of a high-flying company fallen on hard times.

Despite its recent struggles, the company remains the leader in a promising industry which has years of growth ahead.

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What does the future hold for this once-great stock and what will it mean for shareholders?

What return can investors expect from Whole Foods Market and its publicly-traded peers.

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The Story of Whole Foods Market

As he writes in his book, Conscious Capitalism, CEO John Mackey has worked tirelessly as an advocate of integrating all stakeholder groups in a virtuous cycle of positive business practices, which lead to win-win outcomes for everyone involved in or affected by his business. This has been his mission since founding Whole Foods Market (NASDAQ:WFM) in 1980. And Mackey puts action behind his stated principles. Whole Foods Market’s executive compensation program limits CEO pay to a maximum of 19 times (versus the average of 204x) the average employee. Even aside from the pay cap, the compensation policy embodies egalitarian principles, with each executive earning the same base salary and bonus with the intention of promoting teamwork among the management team.

The one exception to this policy is Mackey himself, who reduced his salary to $1, eliminated any additional cash incentives, and committed to donating his future stock options to the company’s nonprofit foundations. In doing so, Mackey stated that, «I no longer want to work for money, but simply for the joy of work itself and to better answer the call to service that I feel so clearly in my own heart.» Mackey’s attitude extends to his employees and the broader workplace – Whole Foods Market has been named among Fortune magazine’s «100 Best Companies to Work For» list for 19 consecutive years, a notable accomplishment in the retail industry, which is known for its abysmal record of employee satisfaction.

Past Performance

The formula has worked well through most of the company’s history. When the first Whole Foods Market – branded store opened in 1980, it was just one of six natural foods supermarkets in the U.S. But after establishing itself, the concept has now grown its store base at a 10% annualized rate from 75 in 1997 to 456 at fiscal year-end 2016. During that time, the company maintained comparable store sales growth in excess of 7% for 11 consecutive years from 1997 through 2007 and, after a hiccup of 5% and -3% performances in 2008 and 2009, respectively, resumed 7% growth each year from 2010 until 2013.

Fuente: Seeking Alpha


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