Sales Rise, Distributors Change at Wild Oats

Sales Rise, Distributors Change at Wild Oats

BOULDER, Colo.Wild OatsMarkets Inc. (NASDAQ:OATS) reported Nov. 4 that for its third quarter (3Q03),ended Sept. 27, sales improved and distributors had been changed.

Sales were up, checking in at $237.0 million from 3Q02s$228.1 million, while gross margin dipped to 29.1 percent of sales from 29.4percent. Operating expenses, including pre-opening expenses, came in higher at$85.0 million. Net loss was $861,000, or $.03 lost per share, compared to thesame period last years net profit of $2.2 million, or $.08 earned per share.

The company reported supply chain challenges contributed toits quarter losses. As previously announced, Wild Oats and distributor Tree ofLife mutually agreed to terminate their primary distribution relationship. WildOats secondary distributor, United Natural Foods Inc. (UNFI), will become thestores primary distributor, with the transition expected to be complete by1Q04. According to investment firm Smith Barney in New York, UNFIs stock hasseen only a slight increase as a result of this new business.

Comparable store sales increased .8 percent compared to a5.6-percent increase experienced in 3Q02. This was due to customer traffic incomparable stores decreasing 2.4 percent, which may have been the result ofhigher out-of-stock inventories caused by supply chain inconsistencies.

The company reported a better outlook for 4Q03 thanks tostrikes that were occurring at unionized grocery stores across SouthernCalifornia and customers instead shopping at Wild Oats.

This year, Wild Oats completed remodeling or resetting 20stores; the chain also has 15 leases and 18 letters of intent signed for newstores slated for 2004 and 2005.