Whole Foods Executive Earnings Insights: Gross Profit Margin, Price Investments
Gross Profit Margin
Charles Grom – Deutsche Bank: Just wondering if you guys could just dig into the gross profit margin improvement a little bit more is obviously a lot better than I think most of us were anticipating and it sounds like about 35 basis points of the 70 was from buying leverage and maybe some early benefits from inflation. I am just wondering if you could flush that out for us. As a follow-up if you could just give us a little bit of look ahead and how sustainable that trend is?
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John Mackey – Co-CEO: We had a great quarter from a gross margin standpoint. As I said we had – when you have strong sales like we do like we had in the quarter really helps with leveraging our expenses down which we had really good leverage in all of our expenses and the other thing that happens we have a really strong sales like we’ve had is that we are able to really cut back on the shrink as products turning a lot better and it has also helped us because we put a lot of systems in place over the last year to really help with that. As far as going forward, we think that we are still really confident that we’ll have – continue to have good performance as we said in the script in our guidance. We don’t think we’ll regularly be up in this range, we really are guiding people back to our normal, normal range because I think it’s really important as we continue to find more flexibility in our pricing and we continue to gain through distribution efficiencies and better buying, that the important thing is that we continue to balance having the good strung margin with continue to reinvesting in our prices, so that we can continue to – we found really great results as we’ve been able to bring over time, over these years, our prices down and really make sure that we’re really priced competitively in each market we are, and we want to continue to be able to do that. I think it’s much more important in the long-term to keeping our top line sales growth going than to get too happy and try to get too much in the margin area.
Edward Aaron – RBC Capital Markets: Just to follow-up on the gross margin question, I was wondering if you could maybe speak to whether you did loosen up on any of your price investments at all in the quarter, and then also, if maybe there were any noteworthy changes in performance by sales department.
Walter Robb – Co-CEO: Again, the improvements that you saw there, as A.C. said, that was an exceptional quarter. Everything lined up half from occupancy leverage and half from the buy side and other disciplines that he mentioned, but we don’t break it out by team. But again, the patterns continue strong in the perishables, but really, they were across all regions, all stores, and so – I’m sorry, maybe I’m missing your question.
Edward Aaron – RBC Capital Markets: No, I just was maybe asking a little bit more on the price investment side, if there was a change versus what you have been doing, that’s all.
Walter Robb – Co-CEO: I’m glad you asked that because actually, we were – we actually improved our competitive position by our own indexing that we do which is now across 70 competitors and 12 markets, our relative position improved. The easing of inflation certainly enabled us to do that and we did make some incremental investments there. And as A.C. the confidence that we are gaining from these results give us the ability to continue to be very – we want to be very aggressive on that as we need to continue to build sales.