Whole Foods' (Nasdaq:WFMI) shares surged on Thursday by more than 15%, one day after the company released its fourth quarter results which surprised industry analysts.
The upscale grocery store posted net income of $57.5 million during the quarter, or $0.33 per share, up from $36.4 million, or $0.20 per share, in the same period a year earlier.
Total sales jumped to $2.1 billion from $1.8 billion in the fourth quarter of 2009. According to Bloomberg, analysts had expected earnings per share of $0.28 on revenues of $2.07 billion.
The company said it has been working on pricing strategies during the downturn, leading it to gain market share at a faster rate than most public food retailers.
Whole Foods' target clients are typically wealthier, which means that unemployment has not taken such a heavy toll on customers, as with other retailers.
Identical store sales growth was 8.7% during the fourth quarter, compared with negative growth of 2.3% in the prior year period, helped by increasing traffic as demand for natural and organic food continues to grow.
During the quarter, the company opened one store and expects to open another three in the first quarter of fiscal 2011, having signed 20 new leases over the last 12 months.
The company, which currently has 301 stores totaling approximately 11.3 million square feet, had cash and equivalents of $644.7 million and total debt of $508.7 millon at quarter-end.
For fiscal 2010, sales increased 12% to $9.0 billion, with identical store sales improving 6.5%. Net income jumped 67% to $245.8 million, or $1.45 per share.
Based on its better-than-expected results, the company raised its fiscal 2011 guidance, expecting $0.07 higher diluted earnings per share of $1.66 to $1.71, representing 16 to 20% growth year-over-year. Total sales growth is forecast to be between 10-12%, while identical store sales growth is now projected at between 5-7%.
So far in the first quarter of fiscal 2011, identical store sales increased 8.9%, versus 0.4% a year earlier.
Whole Foods' has soared more than 15% on Thursday, trading at $47.37 moments before market close, up from its 52-week low of $24.94.