Thread regarding Whole Foods Market Inc. layoffs

Most analysts are either lazy or they work for investment banking houses that are hoping to do some kind of future debt issue (another $1 billion deal anyone?) or maybe be the lead on a merger or acquisition. So they kiss up to management and ask stupid softball questions at post-earnings conference calls. Also it's easy to get excited about a concept or about what same store sales are doing. It's much less exciting to really dig into the numbers and read the fine print in the footnotes. Unfortunately, the type of aggressive accounting on capital leases is legal at this time (although maybe not for long).

@2eds-great post.it amazes me that those same new york lawyers who filed the class action suits against them after the pricing scandals havent looked at the cooking of the books..and those low ball earnings reports that only relieve wall street jitters versus actually producing good healthy revenue growth.

You've confused a yearly drop in same store dales with yearly overall profit growth. The company IS indeed making money. That is, when expenses are subtracted from overall sales, the bottom line is positive. HOWEVER, sales growth has slowed considerably, revenue per store is in decline and so is gross margin. That's why the company is so desperate to add stores -- it's the only way to get any revenue growth overall. The trouble is, it's treating those physical assets as if they are utility bills. Those assets aren't free! They need to be written off with a giant minus sign in the form of either (1) acknowledgement of the existence of long term debt or (2) a subtraction from the company's nest egg -- the value of its equity. By not counting its stores as assets, the effect is to OVERSTATE to investors its return on assets and return on equity and UNDERSTATE long term debt relative to equity. Some have called the accounting here "opaque"....which is a kind way of saying "posdibly deceitful." Perhaps an investigation is warranted to determine if this is actually a violation of securities laws punishable by fines and jail time. Only a proper investigation can determine that.

Technically speaking Whole Foods in not making money. Last quarter earnings missed gross margin, only reason they look as if they made money is because they made it up by labor reduction cost. Check it out all the information is out there. Why do you think investors have no care for the company anymore?

@vma is right but @upu is nailing it - @syq making money on paper and in reality are two different things. Look at the stock price performance, it tells you what people think will happen in the future as it relates to money making

Yes, the company is making money. But that doesn't mean that all individual stores are profitable, particularly when one unravels the accounting that treats facility leases as expenses instead of recognizing them as assets, an intentionally opaque way of accounting. That hides the debt off the balance sheet. Sooner or later those assets have a way of forcing their way above the line. This accounting technique is still legal but controversial.

I used to work for Wholefoods and got severance and all I can say is that it's a very good company that has been mismanaged and now severely suffering from MORALE issues. Most of the STLS who are running the stores are behaving like small dictators and they think firing people is their core job description. The team members made Wholefoods into a strong company but now it's just so sad so see so many frustrated souls.

I checked it - nobody's reporting that stores are closing.

Why would we? We are still making money.