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This spreadsheet supports STUDENT analysis of the case "Whole Foods Market: The Deutsche Bank Report,"

(UVA-F-1776).

This spreadsheet was prepared by Michael J. Schill, Professor of Business Administration. Copyright © 2017 by the University of Virginia Darden School Foundation,
Charlottesville, VA. All rights reserved. For customer service inquiries, send an e-mail tosales@dardenbusinesspublishing.com. No part of this publication may be
reproduced, stored in a retrieval system, posted to the Internet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or
otherwise—without the permission of the Darden School Foundation.

Rev. Feb. 20, 2017


Exhibit 1
WHOLE FOODS MARKET
Share Price Performance of Whole Foods Market indexed to S&P 500 Index (January 2005 to April 2014)

$70

-- Adj Prices --
$60
WFMMt
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###May-13Mar-14
Jan-05 Nov-05 Sep-06 Jul-07 May-08Mar-09 Jan-10 Nov-10 Sep-11 Jul-12

Whole Foods Market S&P500 Index matched to WFM


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Source: Yahoo! Finance, Case writer analysis ###
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Exhibit 2
WHOLE FOODS MARKET
Select Market Share Data

Grocery Sales by Channel


Actual 2011 Forecasted 2016
Traditional Supermarkets 40.1% 37.4%
Supercenters 17.2% 18.5%
Convenience Stores 15.1% 15.6%
Wholesale Clubs 8.5% 9.0%
Drug Stores 5.5% 5.9%
Mass Merchandisers 4.4% 2.8%
Limited Assortment Grocery Stores 2.7% 3.7%
Dollar Stores 2.2% 2.3%
Other 4.3% 4.9%

Top Grocery Retailers in North America


2012 Revenue
($ billions)
Wal-Mart 145.0
Kroger 96.3
Costco 87.3
Target 73.1
Safeway 44.5
Loblaw Cos. 31.8
Publix 27.5
Ahold USA Retail 27.3
7-Eleven 22.0
C&S Wholesale Grocers 21.4
Delhaize America 19.5
H-E-B Grocery Co. 19.4
Sobeys 17.7
Dollar General Corp. 16.1
Meijer, Inc. 14.6
Wakefern Food Corp. 13.6
Metro Inc. 12.0
Whole Foods Market 11.7

Source: Market Share Reporter, Case Writer Estimates


Exhibit 3
WHOLE FOODS MARKET
U.S. Store Count Forecast--Natural and Organic Share vs. Total Industry

2013 2014 2015 2016 2017 2018

Conventional Supermarkets 36,092 36,092 36,092 36,092 36,092 36,092

Natural and Organic Subtota 1,367 1,572 1,808 2,079 2,391 2,750
Assumed Growth Rate 15% 15% 15% 15% 15%
N&O Share of Industry 3.6% 4.2% 4.8% 5.4% 6.2% 7.1%

Source: Deutsche Bank Research; Food Marketing Institute


Exhibit 4
WHOLE FOODS MARKET
Selected Operating Data for Comparable Companies

Average Sales Growth Average


EBITDA M
50%
10%
40%
30% 8%

20% 6%

10% 4%
0% 2%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-10%
0%
2003 2004 2005 2006 2007 2008
-20%
Whole Foods Market Whole Food
Other natural & organic
Other natura
Conventional grocer
Conventiona
Supercenters and wholesalers
Supercenter

Other Natural & Organic is composed of Sprouts and Fresh Market.


Conventional grocer is composed of Kroger, Safeway, and SuperValu.
Supercenters and wholesalers is composed of WalMart and Costco.

Sales Growth
2003 2004 2005 2006 2007 2008
Whole Foods Market 17% 23% 22% 19% 18% 21%
Other natural & organic
Conventional grocer 6% 1% 5% 34% 10% 5%
Supercenters and wholesa 8% 7% 11% 12% 7% 7%

EBITDA Margins
2003 2004 2005 2006 2007 2008
Whole Foods Market 9% 9% 8% 8% 7% 6%
Other natural & organic 8%
Conventional grocer 4% 5% 5% 6% 6% 3%
Supercenters and wholesa 7% 7% 7% 7% 7% 7%

Source: Company SEC Filings.


Average
EBITDA Margins

2005 2006 2007 2008 2009 2010 2011 2012 2013

Whole Foods Market


Other natural & organic
Conventional grocer
Supercenters and wholesalers

2009 2010 2011 2012 2013


1% 12% 12% 16% 10%
8% 13% 14% 41% 25%
-5% 0% 4% -15% -5%
0% 5% 8% 7% 3%

2009 2010 2011 2012 2013


7% 8% 8% 9% 9%
9% 8% 7% 9% 8%
3% 3% 3% 4% 4%
7% 8% 7% 7% 7%
Exhibit 5
WHOLE FOODS MARKET
Selected Financial Data for Comparable Companies
(in millions of USD, except beta; financial statement data as of fiscal year 2013)

Bond
Market Cap Total Credit
Company Sales EBITDA of Equity Debt Beta Rating

Natural & Organic


Whole Foods Market 12,917 1,222 14,481 0 0.70 N.A.
Sprouts Farmers Market 2,438 187 4,102 304 0.75 BB-
The Fresh Market 1,512 138 1,554 25 0.80 N.A.

Conventional Grocers
Kroger 98,375 4,428 23,679 11,311 0.70 BBB
Safeway 36,139 1,579 7,899 4,451 0.75 BBB
Supervalu 17,155 720 1,876 2,531 1.00 B-

Supercenters and Wholesalers


Wal-Mart 476,294 35,742 251,747 55,245 0.60 AA
Target 72,596 6,452 36,806 14,089 0.75 A
Costco 105,156 3,999 49,257 4,985 0.75 A+

Sources: Value Line, Mergent Online, YCharts, Yahoo! Finance, Standard and Poor's, SEC company filings, and casewriter estimates.
ev/ebidta enterprise value

11.85 14,481
23.60 4,406
11.42 1,579

7.90 34,990
7.82 12,350
6.12 4,407

8.59 306,992
7.89 50,895
13.56 54,242
10.97
gs, and casewriter estimates.
Exhibit 6
WHOLE FOODS MARKET
Store Growth Statistics for Whole Foods and Other Industry Comparables

2008 2009 2010 2011 2012


Total Stores
Trader Joe's
Whole Foods Market 275 284 299 311 335
Sprouts 36 40 43 103 148
Fresh Market 86 92 100 113 129
Natural Grocers
Fairway
Other Natural and Organic Retailers
Kroger 2,481 2,469 2,460 2,435 2,424
Safeway 1,739 1,725 1,694 1,678 1,641
SuperValu 2,474 2,421 2,349 2,394 2,434
Wal-Mart (including Sam's Club, U.S. only) 4,258 4,360 4,413 4,479 4,625
Costco (U.S., Canada, & Mexico) 512 527 540 592 606

2008 2009 2010 2011 2012


Same-Store Sales Growth
Whole Foods Market 4.0% -4.0% 7.0% 8.0% 8.0%
Sprouts 9.0% 2.6% 2.3% 5.1% 9.7%
Fresh Market -1.5% -1.1% 5.0% 5.4% 5.7%
Kroger (excluding fuel) 5.3% 3.1% 2.5% 4.9% 3.5%
Safeway (excluding fuel) 1.5% -4.9% -0.5% 4.9% 1.6%
SuperValu (including fuel) 0.5% -1.2% -5.1% -6.0% -2.8%
Wal-Mart (U.S. only) 3.5% -0.8% -0.6% 1.6% 2.4%
Costco (including fuel) 8.0% -4.0% 7.0% 10.0% 7.0%

Source: Company SEC filings; Deutsche Bank Research; Food Marketing Institute
2013

400
362
167
151
72
14
200
2,640
1,335
2,396
4,835
634

2013

7.0%
10.7%
3.2%
3.6%
0.2%
-2.4%
-0.5%
6.0%
Exhibit 7
WHOLE FOODS MARKET
Deutsche Bank Model (millions of USD, except per share figures)

Actual Actual Actual Forecast Forecast


At Fiscal Year End 2011 2012 2013 2014 2015 At Fiscal Year End
Store Growth 4.0% 7.7% 8.1% 10.5% 12.6% Store Growth
Sales Growth 12.2% 15.7% 10.4% 11.1% 14.0% Sales Growth
EBITDA Margin 8.5% 9.0% 9.5% 9.4% 9.8% EBITDA Margin
Tax Rate 38.1% 38.4% 38.8% 39.0% 39.0% Tax Rate

Current Asset Turnover 7.0 5.6 6.5 7.0 7.1 Current Asset Turnover
Current Liabilities Turnover 10.5 10.9 10.7 10.5 10.5 Current Liabilities Turnover
Net PP&E / Store 6.4 6.5 6.7 6.7 6.7 Net PP&E / Store
Annual Dep. & Amort. / Store 1.00 0.93 0.94 0.94 0.94 Annual Dep. & Amort. / Store

Stores 311 335 362 400 450 Stores


Sales 10,108 11,699 12,917 14,351 16,360 Sales
EBITDA 859 1,055 1,222 1,352 1,600 EBITDA
Dep. & Amort. 311 311 339 376 423 Dep. & Amort.
EBIT 548 744 883 976 1,176 EBIT
Taxes 209 286 343 381 459 Taxes
Net Income 339 458 540 596 717 Net Income
Shares Outstanding 350 364 372 372 372 Shares Outstanding
Earnings per Share 0.97 1.26 1.45 1.60 1.93 Earnings per Share

Current Assets 1,453 2,103 1,980 2,050 2,304 Current Assets


Current Liabilities 880 977 1,088 1,238 1,406 Current Liabilities
Net Working Capital 573 1,126 892 812 898 Net Working Capital
Net PP&E 1,997 2,193 2,428 2,680 3,018 Net PP&E
Return on Capital 13.2% 13.8% 16.3% 17.1% 18.3% Return on Capital

Source: Company Financial Reports, Deutsche Bank Analyst report and casewriter estimates
Actual Actual Actual Forecast Forecast
2011 2012 2013 2014 2015
4.0% 7.7% 8.1% 10.5% 12.6%
12.2% 15.7% 10.4% 11.1% 14.0%
8.5% 9.0% 9.5% 9.4% 9.8%
38.1% 38.4% 38.8% 39.0% 39.0%

7.0 5.6 6.5 7.0 7.1


10.5 10.9 10.7 10.5 10.5
6.4 6.5 6.7 6.7 6.4
1.00 0.93 0.94 0.94 0.94

311 335 362 400 450


10,108 11,699 12,917 14,351 16,360
859 1,055 1,222 1,352 1,603
311 311 339 376 423
548 744 883 976 1,180
209 286 343 381 460
339 458 540 596 720
350 364 372 372 372
0.97 1.26 1.45 1.60 1.93

1,453 2,103 1,980 2,050 2,304


880 977 1,088 1,238 1,405
573 1,126 892 812 899
1,997 2,193 2,428 2,680 2,883
13.2% 13.8% 16.3% 17.1% 19.0%
Exhibit 8
WHOLE FOODS MARKET
Demographic and Capital Markets Data

U.S. Population Growth Rates


2014-2015 0.82%
2015-2060 (Compound Annual Growth Rate) 0.70%

Yield on U.S. Treasuries


6 Months 0.05%
1 Year 0.10%
3 Years 0.90%
5 Years 1.65%
30 Years 3.40%

Average Yields on U.S. Corporate Bonds


5-Year 30-Year
Maturity Maturity
AA 1.90% 4.29%
A 2.09% 4.39%
BBB 2.49% 4.80%
BB 4.00% 6.83%
B 4.90% n/a

Source: Bloomberg and US Census Bureau