August 31, 2005.
Whole Foods Market, Inc. (NASDAQ: WFMI) today provided an update on the current state of its stores in Louisiana and Florida in the aftermath of Hurricane Katrina. While there has been property damage and product loss, the Company is pleased to report that so far it is not aware of any injuries to its team members. The Company estimates a sales impact on the fourth quarter, which began July 4, 2005 and ends September 25, 2005, in the range of $5 million to $6 million.
“We are working to identify the immediate and long-term needs of our team members impacted by Hurricane Katrina. Our efforts thus far include the establishment of a special internal relief fund supported by donations from fellow team members and a guaranteed job at another store location,” said John Mackey, Whole Foods Market chairman and CEO. “In addition, our stores across the country have made it easy for shoppers wishing to support the relief efforts to simply add a donation to their purchase which will go directly to the American Red Cross Disaster Relief Fund. We will make a matching donation for in-store customer donations up to a total of $1 million.”
The Company operates five stores in South Florida, which all closed early on Thursday, August 25, 2005 in preparation of Katrina's landfall. Only two stores remained closed on Friday. One of which re-opened on Saturday and the other re-opened on Sunday, August 28, 2005. While there was some store product loss, there was no store or regional office property damage.
The Company operates three stores in Louisiana located in New Orleans, Metairie, and Baton Rouge. The New Orleans and Metairie stores closed late on Saturday, August 27, 2005, while the Baton Rouge store closed late on Sunday. The Baton Rouge store re-opened on Tuesday, August 30, 2005, with only minor product loss due to a loss of power and no property damage reported. The potential re-opening of the New Orleans and Metairie stores is unknown at this time. The Company has not been able to access those stores and will not be able to do so until those areas are cleared for re-entry which may take several weeks. Based on the best information the Company has available, however, it is assumed that both stores have suffered severe wind and water damage resulting in significant structural damage as well as a complete loss of inventory.
The Company has property, flood, casualty, and business interruption insurance coverage and has just started the process of working with its insurer to assess damages, a process that could take several months in the case of the New Orleans and Metairie stores. The Company expects to record a one time charge in the fourth quarter for estimated uninsured losses. In the event that either or both of those stores are considered to be a total loss, the Company's current intention is to rebuild and reopen those stores as quickly as possible.
About Whole Foods Market: Founded in 1980 in Austin, Texas, Whole Foods Market® is a Fortune 500 company and the largest natural and organic foods retailer. The Company had sales of $3.9 billion in fiscal year 2004 and currently has 171 stores in the United States, Canada and the United Kingdom.
The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties, which could cause our actual results to differ materially from those described in the forward looking statements. These risks include but are not limited to general business conditions, the timely development and opening of new stores, the impact of competition, and other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K/A Amendment No. 2 for the fiscal year ended September 26, 2004. The Company does not undertake any obligation to update forward-looking statements.
