Same-store sales decline in the quarter but not as much as expected.

(Bloomberg)— Inc.’s challenge of turning around Whole Foods Market Inc. looks like it won’t be quite so difficult.

The organic-food grocer, which agreed to be acquired by the e-commerce giant in June, posted quarterly results that exceeded analysts’ estimates. While same-store sales still declined in the period, the drop was less severe than projected.

The Austin, Texas-based company also managed to return to growth on that basis in the first three weeks of this month.

The improving results should be encouraging to Amazon, No. 1 in the Internet Retailer 2017 Top 500, as it prepares to push into the bricks-and-mortar grocery business. Jeff Bezos’s online behemoth agreed to buy Whole Foods for $13.7 billion last month, marking the biggest acquisition in his company’s history.


“Momentum has accelerated,” Whole Foods CEO John Mackey said in a statement.

Earnings amounted to 36 cents a share last quarter, excluding some items. That topped the 33-cent estimate. Same-store sales—a closely watched measure—fell 1.9%, compared with a projected drop of 2.2%.

The company isn’t updating its outlook for the rest of the year, citing the looming takeover by Amazon.

Whole Foods expects the deal to be completed in the second half of 2017. The shares have been hovering near the purchase price of $42.


In the immediate aftermath of the deal, the stock climbed above $42, fueling speculation that a rival suitor might emerge. That idea has faded: Wal-Mart Stores Inc. (No. 3), one of the few companies that could consider a bidding war with Bezos, opted not to make a counteroffer, a person familiar with the matter said last month.

The Amazon deal was hatched amid the worst crisis in Whole Foods’ history. Sales had dropped off, and activist investor Jana Partners was pushing for changes at the supermarket chain.

Mackey’s lifeline

In April, Whole Foods reached out to Amazon and—two months later—the blockbuster deal was announced. The company also fielded interest from at least four private equity firms and Albertsons Co. (No. 157).

The upscale grocer, which helped pioneer the market for organic food in the U.S., has been battered in recent years by intense competition from traditional retailers. Kroger Co. (No. 88) and Wal-Mart have aggressively expanded their organic offerings, often at lower prices.

Amazon has said little publicly about its plans for the company, but it’s expected to use its supply prowess to bring prices down. The deal has weighed on the shares of other grocers and packaged-food companies, as Wall Street ponders a world where the e-commerce giant becomes a major grocery competitor.