Sales at Whole Foods Markets are looking better at the cash register than on paper.
The Austin, Texas-based grocer grew sales by about 6% in fourth-quarter fiscal 2018, according to officials of parent company Amazon, although arriving at that figure required some adjustments from what was officially reported as a 3% sales decline in the e-commerce giant’s “physical stores” division, which consists mainly of Whole Foods.
The discrepancy resulted from a change in Whole Foods’ reporting period last year to align its financial calendar with that of its new corporate parent, resulting in five extra days in last year’s fourth quarter. It’s also because Whole Foods' sales conducted online for delivery and pickup—a fast-growing component of the total given the rapid expansion of the service—are accounted for not in physical stores division but in its online sales.
Sales in physical stores for the quarter totaled $4.4 billion; Amazon’s online sales grew by 14% to $39.8 billion.
A “clean” quarter for Whole Foods won’t be reported until Amazon reviews figures from first-quarter 2019, but even then will need to be adjusted for expanding online sales. Amazon has yet to reveal comparable-store figures from Whole Foods publicly.
That said, the figures suggest “large market share gains for Amazon in grocery,” Wolfe Research analyst Scott Mushkin said in a note to clients. “This is especially true for volume share given our research that suggests that Whole Foods is lowering price.”
In total, Amazon’s $72.4 billion in quarterly sales in the quarter came in slightly ahead of company guidance and analyst estimates, with sales in North America growing by 18.3% and internationally by 19%. Profits similarly surpassed both guidance and Wall Street estimates, although investors appeared rattled by guidance suggesting Amazon would increase spending, affecting its profitability forecast for the first quarter.