All eyes remain on Whole Foods as rumors continue to persist of a potential buy-out of the company. In the meantime, Whole Foods has released its own strategy for growth and shaken up its leadership appointments; replacing five Board members, naming a new chairwoman, and a new Chief Financial Officer.
“We are accelerating our path to enhanced value creation to deliver better returns for our shareholders,” said John Mackey, Co-Founder and CEO. “Today’s announcement is a powerful combination of accelerated initiatives and new cost savings with clear timelines to deliver. We are on a path to return to positive comparable store sales and earnings growth next year. Our increased dividend and new share repurchase authorization demonstrate our Board’s confidence in our long-term growth strategy and continued ability to generate strong cash flow. The Board will continue its comprehensive review of all opportunities to create value. We look forward to continuing our dialogue with shareholders and providing future updates on our progress.”
Keith Manbeck has been named as the new CFO for the retailer, as disclosed in a press release. Manbeck would be stepping into his new position, effective May 17, 2017, bringing 20 years of financial and operations experience with him, according to Nasdaq.com. Most recently, Manbeck served as SVP of Digital Finance, Strategy Management, and Business Transformation at Kohl’s Corporation. In his role at Whole Foods, Manbeck will be looking to help the company engage in an accelerated plan to enhance shareholder value.
Further boosting its new operational focus, Whole Foods has announced a sizable reshaping to its Board of Directors. As the company appoints five new faces and a new leader to the Board, the Wall Street Journal speculated that this move was made in an effort to show that the chain is open to change, and resultant of efforts to “fend off a potential Board fight with activist investor Jana Partners, LLC.” As we previously reported, Jana Partners scooped up an 8.3 percent stake in Whole Foods, and there has been speculation that the group is pushing the retailer for a sale.
Whole Foods has also named Gabrielle Sulzberger as its new Chair of the Board, and Chair of Nominating & Governance Committee. Sulzberger has served as an independent director of the company since 2003, according to a release, in addition to serving on public company boards. Through her experience, she is able to provide Whole Foods with financial, M&A, and risk assessment expertise.
The Board of Directors at Whole Foods will now encompass 12 Directors. 10 of these are independent, with 6 having been replaced within the last 7 months. In a release, Mackey disclosed that the five new appointments will position the company well for its next stage of growth. The Members are as follows:
The New York times stated that this Board Member refreshment, and new CFO, comes from the company’s restless shareholders, including Neuberger Berman. The source cited that Jana Partners was urging Whole Foods to select four new nominees, with Whole Foods opting for its own five appointments.
The company also announced the following updates as it looks to gain more ground in the buy-side sector:
The company also reported a total sales increase of 1.1 percent to a record $3.7 billion, net income of $99 million, in addition to other movement in its 2017 Q2 that can be viewed here. Seeking Alpha reported that the retail beat expectations on its revenue by $10 million.
Will these strategies help the retailer boost its growth, or is a sale still in Whole Foods’ future? Deli Market News will report as the news unfolds.
