Natural and organic grocery chain Wild Oats Markets Inc. said Thursday its second quarter profit dropped 97 percent due to higher costs and charges that offset improved sales.
For the quarter ended June 30, net income fell to $127,000, or less than 1 cent per share, from $4.9 million, or 16 cents per share in the prior year period.
Analysts polled by Thomson Financial expected profits of 18 cents per share.
Higher expenses and charges contributed to the chain’s profit drop. Selling, general and administrative expenses rose 44 percent while restructuring and asset impairment charges climbed 26 percent.
Revenue, though, rose 5 percent to $311.8 million from $296.6 million in the second quarter of 2006.
Same-store sales grew 3.1 percent in the quarter. Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.
Wild Oats rival Whole Foods Market Inc. is planning to buy the chain for $565 million if the deal can survive a court challenge from the Federal Trade Commission. The FTC is asking for a preliminary injunction to stop the deal on antitrust grounds.
A hearing on the case was held July 31 and Aug. 1 but no decision has been made yet.