Whole Foods to cut 1500 jobs

28 Sep 2015 | Author: | No comments yet »

Grocery Chain Whole Foods Cutting About 1,500 Jobs.

Grocery chain Whole Foods is cutting about 1,500 jobs over the next eight weeks as it looks to lower prices and keep up with competition. It anticipates workers whose jobs are cut will find other jobs from the almost 2,000 open positions across the company or from new jobs that’ll be created by more than 100 new stores in development. Whole Foods Market has faced scrutiny over its prices, which were found to be too high for prepackaged foods by the New York Department of Consumer Affairs in June, Reuters reports. Whole Foods has said that it is taking steps to prevent overcharging, including training for workers and a pledge to give away products if customers discover they were overcharged. The primary factors that have impacted our rating are mixed — some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.

In the third quarter of fiscal 2015, its reported earnings and comparable store sales both fell below Wall Street estimates, which led to a lower-than-expected fourth quarter earnings forecast. The first location is set to open next year in Los Angeles, and leases have been signed for additional locations in Bellevue, Washington; Houston; Portland, Oregon; and Santa Monica, California. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity. This bleak outlook could be due to increased competition from mainstream retailers like Kroger and Wal-Mart (WMT – Analyst Report) in the natural and organic food business, as well as hefty allegations that the company is overcharging for pre-packaged goods in some New York City locations.

WFM’s debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels.

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