Shares of Whole Foods Market rose more than 6 percent during aftermarket trading on Wednesday after the company revealed that it would be eliminating its co-CEO structure and posted earnings that beat Wall Street expectations.
Whole Foods tapped John Mackey, 62, who was one of the company's co-founders, to serve as its sole CEO, effective Dec. 31. Walter Robb, 62, its other co-CEO, will remain with the company's board and as a senior advisor.
"In a year that presented many headwinds for food retailers, we made measurable progress on positioning our company for continued success while producing industry-leading sales per gross square foot and healthy returns on invested capital," Mackey said in a statement.
The company said its fiscal-fourth quarter earnings were $88 million, or 28 cents a share, on $3.50 billion in revenue.
Analysts expected the company to report earnings of 24 cents a share on $3.50 billion in revenue, according to Thomson Reuters estimates.
In the year-ago period, Whole Foods earned $56 million, or 16 cents a share, on revenue of $3.44 billion in revenue.
Same-store sales for the company fell 2.6 percent during the quarter, a deeper dive than the 2 percent that Wall Street had expected, according to StreetAccount.
Grocers have been pressured by food deflation, which is putting pressure on their margins. Many restaurant chains have cited these lower food costs as a reason diners are eating at home more often.
Whole Foods said it expects sales growth for fiscal 2017 to be in the range of 2.5 percent to 4.5 percent, while same-store sales are projected to be flat to down 2 percent for the year.
Earnings for fiscal 2017 are expected to be about $1.42 a share, excluding the impact of any potential share repurchases.
According to Thomson Reuters, analysts had been expecting Whole Foods to earn $1.47 a share in fiscal 2017.
Whole Foods also said Executive Vice President and Chief Financial Officer Glenda Flanagan, 62, will retire at the end of fiscal 2017. She also plans to serve the company in a senior advisor capacity.
Mary Ellen Coe, vice president of sales and product operations for Google, was named to Whole Foods' board. Her addition brings the total number of seats on the board to 12.
Whole Foods added that Robb, who has been with the company for 25 years, will remain chairman of Whole Kids Foundation and Whole Cities Foundation. He will transition out of its co-CEO duties on Dec. 31.
In a filing with the Securities and Exchange Commission, Whole Foods said Robb would receive $10 million in severance and a 30 percent lifetime discount card for purchases at the company's stores.
Whole Foods said it expects to have a charge of about $13 million associated with Robb's separation agreement, which it will incur in the fiscal first quarter. The estimated 3 cents a share impact of this charge isn't reflected in its fiscal 2017 forecast.