lefty.
here's an austin article on the WFMI shareholder's meeting that might pique your interest. note it's a couple weeks old.
-chris.
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Whole Foods gathering not happy
Sagging stock price dominant topic of concern at annual stockholder meeting
By R. Michelle Breyer
American-Statesman Staff
Published: March 30, 1999
BOULDER, Colo. -- John Mackey, the outspoken chief executive of Whole Foods Market Inc., said it's only a coincidence that his company held its annual meeting this year in Boulder.
He said it has nothing to do with the fact that the corporate headquarters of Wild Oats Markets Inc. -- his company's most formidable competitor in natural foods retailing -- is located only three miles from where the Whole Foods annual meeting was held Monday and not far from Whole Foods' new Boulder store.
But before a crowd at the Boulderado Hotel in downtown Boulder, Mackey did make something clear with words, if not with actions.
"I don't like Wild Oats," he said.
There was something that investors at Monday's annual meeting made clear they didn't like, either: Whole Foods' shrinking stock price.
Whole Foods stock has gone from more than $70 last March to $31.87 1/2 on Monday.
Like others, Whole Foods shareholder Regina VanDuzee wanted to know why.
"Their prospects looked good," said VanDuzee, who bought the stock at $42 a share after walking inside Whole Foods' new Boulder store last year. "But it is one of the few stocks I have that has gone down."
VanDuzee was one of about 50 shareholders who turned out for the meeting at the Boulderado Hotel -- Boulder's answer to Austin's historic Driskill Hotel. Shorts and hiking boots far outnumbered suits and ties, among the company's executives and the shareholders alike. Unlike last year's meeting in Washington, D.C., there were no union picketers or protesters out front in this right-to-work state.
By far, the topic of discussion among shareholders was their sagging investments.
Whole Foods stock edged downward despite a record year in 1998 that saw the company do $1.4 billion in sales. At the end of the fiscal year the company had 87 stores, opening big new stores and acquiring such companies as New England's Bread and Circus, the East Coast chain Fresh Fields, California's Mrs. Gooch's and North Carolina's Wellspring Markets.
Two weeks ago, Whole Foods announced it was acquiring Nature's Heartland, a four-store Boston chain that will increase the company's dominance in New England.
But such rapid growth has come at a price.
In January, Whole Foods announced it would not meet first-quarter earnings expectations because of high costs associated with labor, Y2K remediation costs and the launch of WholeFoods.com, the company's new Internet retailing site. Whole Foods shares plummeted from $44.50 to $33.50 per share in one day.
Clearly, Whole Foods has suffered along with the entire "healthy living" sector on Wall Street.
Wall Street analysts and big investors are expressing skepticism at Whole Foods' ability to compete with conventional supermarkets that are starting to carry more natural foods, Mackey said. That skepticism has contributed to the stock's volatility, he said.
"We've got basically some gamblers who want to see what will happen in the next quarter or two," he said. "When our growth slowed down, everybody headed for the exit door.
"Consistent earnings and growth will provide more stability," Mackey said.
Curt Westphal, who drove into Boulder Monday from the Denver suburb of Arvada, bought the stock at $67 because his Austinite father suggested he look at the store. He came to find out why he had lost $5,000.
Westphal, who said he could care less about 20 varieties of granola, said he fears the natural food industry will go the way of microbreweries. Stocks of such companies as Samuel Adams have been battered as the industry has become crowded.
"(Microbreweries were) a fad that never came back," Westphal said. "I'm not convinced this isn't another fad."
Despite the naysayers, Mackey said he is as confident as ever that Whole Foods will continue to grow and prosper, despite competition. If anything, he said he believes the conventional supermarkets serve as a gateway to Whole Foods by introducing shoppers to natural and organic foods.
This year, the company will open 10 new stores, with 15 to 20 new locations opening in 2000, Mackey said. Whole Foods plans to have 200 stores within the next three years, entering such markets as Seattle and Atlanta.
Several of these new locations are slated for other Wild Oats markets such as Denver, St. Louis, Mo. and Albuquerque and Santa Fe in New Mexico.
At least publicly, Wild Oats was nonchalant about impact of Whole Foods' new store in Boulder -- some estimate sales at the three Wild Oats stores have dropped more than 10 percent -- or the annual meeting taking place just a few miles away.
"We haven't really given it much thought," said Wild Oats Chief Financial Officer Mary Beth Lewis. "We've been coexisting with them in Boulder for a while. It's a non-event for us." |
