Question-and-Answer Session
Operator
Yes, I am still here. (Operator Instructions) And we will take our first question from the side of Simeon Gutman of Goldman Sachs. Go ahead please.
Simeon Gutman - Goldman Sachs
Hey, with respect to the core business, excluding the Oats investment, is it fair to assume net earnings growth would have approximated closer to historical levels and that of course bakes in, pre-opening would be a little bit higher and interest income probably a little lower due to less cash balances? And then second of all: when do you expect Oats to be accretive?
Glenda Chamberlain
We are not answering the second question; we haven't given any guidance on when we expect Oats to be accretive and we have given a lot of information in the press release about our core results excluding Oats. So year wise we would not have had interest expense of course on the $700 million, but we do have a significant increase year-over-year in pre-opening expenses, and even without Oats we had seen a decline year-over-year and income before pre-opening and interest expense due to the increase in direct store expenses, which was primarily health care and the results of the new stores. Thank you, John. As we said we had 25 new stores in the fourth quarter compared to 15 new stores in the fourth quarter of the prior year.
Simeon Gutman, - Goldman Sachs
Okay. And then the second one and last one if I could: Are you seeing any signs of a weakening consumer in some of the regions where there is more pressure, for example California or Florida?
John Mackey
Yeah, we are not. One of the myths out there about Whole Foods Markets, I mean, is that we are some kind of luxury retailer and we get once in that category and whenever the economy gets weak everybody comes out and says: ?gosh, Whole Food sales are going to fall?. However, that's never been the case. We've been doing this for 29 years and every time there is a recession our sales don’t fall, in fact, during the recession our comps went up into double-digits, they increased during the recession. So I just think that's a myth that no matter how many times we prove that wrong its mini head of hydro we can't seem to kill all the heads. And I might as well address the California question as well: No, we are not seeing any weakness in our California stores due to the so called bubble burst and we are going actually extend the [wall] in California.
- To read the full transcript on Seeking Alpha, click here »
