NEW YORK — Whole Foods announced a board shake-up and cost-cutting plan Wednesday as it fights to hold onto shoppers who have more choices about where to buy the natural and organic foods the chain is known for.
The company also said sales fell 2.8 percent at established locations for the three months that ended April 9, the seventh straight quarter in which the closely watched metric has declined. Whole Foods has blamed its struggles on customers increasingly turning to “good enough alternatives.” Overall competition is also intensifying, with more places where people can get groceries.
Whole Foods named five new independent directors to its board, including Panera CEO Ron Shaich, as well as a new board chair and new chief financial officer. It also announced a range of moves aimed at improving its financial results, including plans to cut $300 million in costs by its fiscal 2020.
The moves come after activist investor Jana Partners disclosed a stake in Whole Foods last month and outlined an array of issues it wanted to discuss with the Austin, Texas-based company. Whole Foods shares rose 2 percent to $37.00 in after-hours trading.
As sales have slumped, Whole Foods executives have tried to highlight what distinguishes their chain from rivals. Then in February, the company said it no longer sees the potential for expanding its flagship chain to 1,200 locations, up from the approximately 470 it has in the United States, Canada and the United Kingdom.
“Over the past 38 years, Whole Foods Market has played a leadership role in fresh, healthy, natural, and organic foods becoming mainstream,” CEO and co-founder John Mackey told analysts at the time. “Now that we have, we must revisit the question of how to best serve all of our stakeholders.”
On Wednesday, Whole Foods said it expects its various initiatives to help sales at established locations turn positive by the end of its fiscal 2018. For this fiscal year, it still expects sales to fall as much as 2.5 percent at established locations.
For its fiscal second quarter, Whole Foods Market Inc. said its profit fell to $99 million, or 31 cents per share. Not including one-time items, it earned 37 cents per share, which was in line with Wall Street expectations, according to Zacks Investment Research. Total revenue was $3.74 billion, above the $3.73 billion analysts expected.