Press Release

Whole Foods Market Announces Third Quarter Results

Sales Increase 23%; Net Income Increases 31% and Diluted EPS Increase 25%; Announces 10 New Leases, Increasing Store Development Pipeline to Record 3.5 Million Square Feet

July 28, 2005. Whole Foods Market, Inc. (NASDAQ: WFMI) today reported sales and earnings for the 12-week quarter ended July 3, 2005. For the third quarter, sales increased 23% to $1.1 billion. This increase was driven by 13% weighted average year-over-year square footage growth and comparable store sales growth of 15.2%. Sales in identical stores (excluding four relocated stores and two major store expansions) increased 13.2% for the quarter. Net income increased 31% to $41.7 million, diluted earnings per share increased 25% to $0.60, and Economic Value Added (EVA) improved $6.5 million to $10.4 million.

For the 40-week period ended July 3, 2005, sales increased 22% to $3.6 billion, with sales in comparable stores increasing 12.6% and sales in identical stores increasing 11.3%. Net income increased 27% to $131.6 million, diluted earnings per share increased 21% to $1.93, and EVA®) improved $12.8 million to $30.1 million.

"We are producing impressive sales and earnings results even as we compare against one of the best years in our company's history. Our comparable stores have produced a sales increase of 12.6% year to date on top of a 15.2% increase last year, our new stores continue to perform above our expectations, producing a record $618,000 in average weekly sales during the quarter, and our net income has increased 27% year to date on top of a 34% increase last year," said John Mackey, Whole Foods Market CEO, Chairman and Co-founder. "We are working hard to capitalize on the tremendous growth opportunities that lie ahead of us by steadily increasing our store development pipeline, which at 3.5 million square feet currently represents 64% of our existing square footage. We believe our goal of $10 billion in sales by the year 2010 is well within our reach."

Store Returns for the Quarter	Average Size	Average Comps	NOPAT ROIC	# of Comp Stores
Stores over 11 years old	29,000	11.3%	72%	36
Stores between eight and 11 years old	29,000	13.6%	69%	35
Stores between five and eight years old	32,000	12.7%	52%	34
Stores between two and five years old	33,000	14.7%	27%	39
Stores less than two years old (including relocations)	42,000	39.1%	7%	15
Stores in comparable store base	32,000	15.2%	40%	159
Stores open at the end of the third quarter	33,000	-	35%	170

In the quarter, gross profit increased 72 basis points to 35.2% of sales, and direct store expenses decreased 13 basis points to 25.3% of sales, resulting in store contribution of 9.9%. For the 159 stores in the comparable store base, gross profit improved 96 basis points to 35.5% of sales, and direct store expenses improved 31 basis points to 25.1% of sales, resulting in a 127 basis point increase in store contribution to 10.4%. General and administrative (G&A) expenses increased 49 basis points to 3.5% of sales.

The following table shows the Company's quarterly results compared to its historical four-year average results. While there may be more variability during a particular quarter, the Company points out the consistency of these line items as a percentage of sales over time.

Historical Performance	FY01	FY02	FY03	FY04	4-Year Average	3Q05	YTD05
Gross profit	34.7%	34.6%	34.2%	34.7%	34.6%	35.2%	35.1%
Direct store expenses	25.4%	25.2%	25.3%	25.6%	25.4%	25.3%	25.4%
Store contribution	9.3%	9.4%	9.0%	9.1%	9.2%	9.9%	9.7%
G&A	3.6%	3.6%	3.2%	3.1%	3.3%	3.5%	3.2%

Capital expenditures in the quarter were $81 million of which $51 million was for new store development. During the quarter, the Company produced cash flow from operations of $89 million and paid approximately $16 million to shareholders in quarterly dividends of $0.25 per share. Cash and cash equivalents, including restricted cash, were approximately $361 million at the end of the quarter, and total long-term debt was approximately $19 million. During the quarter, approximately 124,000 of the Company's zero coupon convertible debentures were voluntarily converted by bondholders to approximately 1.3 million shares of common stock, resulting in a decrease in the zero coupon convertible debt from $79 million at the end of the second quarter to $13 million at the end of the third quarter.

In the third quarter, the Company opened three new stores in Toronto, Canada; Middletown, NJ; and Metairie, LA (a relocation), ending the quarter with 170 stores totaling approximately 5.5 million square feet. The Company expects to open five stores during the fourth quarter, ending the fiscal year with 175 stores and approximately 5.8 million square feet in operation.

The Company is pleased to announce the recent signing of ten new store leases representing a total of approximately 616,000 square feet which are as follows: Cupertino, CA (63,000 s.f.); Hollywood, CA (61,000 s.f.); San Jose, CA (45,000 s.f.); Pembroke Pines, FL (55,000 s.f.); Schaumberg, IL (67,000 s.f.); Minneapolis, MN (73,000 s.f.); Paramus, NJ (77,000 s.f.); South Hills, PA (68,000 s.f.); Dallas, TX (51,000 s.f.); and Madison, WI (55,000 s.f.). The following table provides additional information about the Company's current store development pipeline.

Stores in Development 7/28/05 7/28/04 % Change Number of stores in development 65 49 33% Average size (gross square feet) 53,400 47,800 12% As a percentage of existing store average size 164% 153% - Total square footage under development 3,518,000 2,351,000 50% As a percentage of existing square footage 64% 47% -

Updated Guidance for Fiscal Year 2005

For fiscal year 2005, the Company expects sales growth slightly above its previously stated range of 15% to 20% and comparable store sales growth slightly above its previously stated range of 9% to 11%. Weighted average square footage growth is expected to be approximately 13% based on the opening of 15 new stores, including three relocations. The Company continues to expect diluted earnings per share growth for the year to be lower than sales growth primarily due to a previously announced one-time charge in the fourth quarter now estimated at approximately $10 million to $15 million, caused by the anticipated acceleration in vesting of the Company's outstanding stock options. The Company expects pre-opening and relocation expense of $23 million to $24 million for the year. The Company expects G&A expenses for the remainder of the fiscal year to be higher as a percentage of sales compared to the prior year primarily due to the relocation of the Company's headquarters in January, which is expected to add approximately $4 million in G&A expenses annually. Capital expenditures are expected to be at the high end of the Company's previous guidance range of $300 million to $320 million.

The Financial Accounting Standards Board ("FASB") recently issued a proposed FASB Staff Position on accounting for rental costs incurred during the construction period that, if adopted, would require construction-period rentals to be recognized as expense for reporting periods beginning after September 15, 2005. If earlier adoption is permitted, the Company may decide to retroactively apply these requirements to its fiscal year 2005 and prior-year results to conform to the new accounting rules. The Company's guidance excludes any impact from these lease accounting rule changes, as FASB has not issued a final statement. For the first two quarters of fiscal 2005, the impact on earnings would be approximately $0.02 per diluted share each quarter, and the Company estimates that the impact on earnings in the third and fourth quarters would be approximately $0.03 to $0.04 per diluted share each quarter. The impact would be higher in the second half of the year primarily due to more stores under construction.

Growth Goals for Fiscal Year 2006

The Company has a stated long-term growth goal of $10 billion in sales by the year 2010. For fiscal year 2006, the Company expects total sales and earnings growth of 15% to 20% despite difficult comparisons due to the Company's above-average results in 2004 and so far in 2005. The Company also expects a weighted average year-over-year increase in square footage in line with its stated 15% goal.

Stock Option Strategy

In December 2004, FASB finalized Statement 123R, Share-based Payment, which requires all companies to expense share-based payments, including stock options, at fair value. The Company expects to begin expensing options in the first quarter of fiscal year 2006.

Though not retroactive, the charge to earnings resulting from this rule includes the impact of stock options granted in prior years, since the expense is recognized over the vesting period of the options, which for the Company has been four years. Even if the Company never granted another option after today, it would still have stock option expense until all past option grants were fully vested. In order to prevent this "overhang" from past option grants impacting future results, the Company previously announced its intention to accelerate the vesting of all outstanding stock options sometime in September unless there are further delays and/or the rule is overturned. The accelerated vesting of options will create a one-time, mostly non-cash charge in the fourth fiscal quarter of this year of approximately $10 million to $15 million. The actual amount of the expense will vary depending on a number of factors, primarily the closing stock price at the date of the acceleration.

The Company's current intention is to keep its broad-based stock option program in place, but going forward it will limit the number of shares granted in any one year so that net income dilution from equity-based compensation expense will not exceed 10% in future years. The Company believes this strategy is best aligned with its stakeholder philosophy because it limits future earnings dilution from options while at the same time retains the broad-based stock option plan which it believes is important to team member morale, its unique corporate culture and its success.

About Whole Foods Market: Founded in 1980 in Austin, Texas, Whole Foods Market® is a Fortune 500 company and the largest natural and organic foods retailer. The Company had sales of $3.9 billion in fiscal year 2004 and currently has 171 stores in the United States, Canada and the United Kingdom.

The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties, which could cause our actual results to differ materially from those described in the forward looking statements. These risks include but are not limited to general business conditions, the timely development and opening of new stores, the impact of competition, and other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K/A Amendment No. 2 for the fiscal year ended September 26, 2004. The Company does not undertake any obligation to update forward-looking statements.

Whole Foods Market, Inc.
Consolidated Statements of Operations (unaudited)
(In thousands, except per share amounts)

	Twelve weeks ended				Forty weeks ended
	July 3, 2005		July 4, 2004		July 3, 2005		July 4, 2004
Sales	$	1,132,736	$	917,355	$	3,586,222	$	2,937,644
Cost of goods sold and occupancy costs	733,931		600,961		2,327,103		1,917,279
Gross profit	398,805		316,394		1,259,119		1,020,365
Direct store expenses	286,343		233,111		912,221		746,717
Store contribution	112,462		83,283		346,898		273,648
General and administrative expenses	39,618		27,551		114,792		92,203
Pre-opening and relocation costs	6,022		3,258		16,736		7,780
Operating income	66,822		52,474		215,370		173,665
Other income (expense): Interest expense	(163)		(1,319)		(2,213)		(5,656)
Investment and other income	2,868		1,782		6,175		4,749
Income before income taxes	69,527		52,937		219,332		172,758
Provision for income taxes	27,811		21,174		87,733		69,103
Net income	$	41,716	$	31,763	$	131,599	$	103,655
Basic earnings per share	$	0.63	$	0.51	$	2.05	$	1.70
Weighted average shares outstanding	65,899		61,951		64,313		61,019
Diluted earnings per share	$	0.60	$	0.48	$	1.93	$	1.59
Weighted average shares outstanding, diluted basis	70,373		68,446		69,580		67,461
Dividends per share	$	0.25	$	0.15	$	0.69	$	0.45
A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations follows (in thousands):

	Twelve weeks ended				Forty weeks ended
	July 3, 2005		July 4, 2004		July 3, 2005		July 4, 2004
Net income (numerator for basic earnings per share)	$	41,716	$	31,763	$	131,599	$	103,655
Interest on 5% zero coupon convertible subordinated debentures, net of income taxes	483		1,092		2,441		3,598
Adjusted net income (numerator for diluted earnings per share)	$	42,199	$	32,855	$	134,040	$	107,253
Weighted average common shares outstanding (denominator for basic earnings per share)	65,899		61,951		64,313		61,019
Potential common shares outstanding:   Assumed conversion of 5% zero coupon convertible   subordinated debentures	1,376		3,280		2,142		3,281
Assumed exercise of stock options	3,098		3,215		3,125		3,161
Weighted average common shares outstanding and   potential additional common shares outstanding   (denominator for diluted earnings per share)	70,373		68,446		69,580		67,461
Basic earnings per share	$	0.63	$	0.51	$	2.05	$	1.70
Diluted earnings per share	0.60		0.48		1.93		1.59

Whole Foods Market, Inc.
Consolidated Balance Sheets
July 3, 2005 (unaudited) and September 26, 2004
(In thousands)

Assets	2005		2004
Current assets: Cash and cash equivalents	$	328,044	$	198,377
Restricted cash	33,084		23,160
Trade accounts receivable	63,485		64,972
Merchandise inventories	171,816		152,912
Prepaid expenses and other current assets	21,333		16,702
Deferred income taxes	29,449		29,449
Total current assets	647,211		485,572
Property and equipment, net of accumulated depreciation and amortization	1,046,958		904,825
Goodwill	112,482		112,186
Intangible assets, net of accumulated amortization	21,127		24,831
Other assets	5,169		20,302
Total assets	$	1,832,947	$	1,547,716
Liabilities And Shareholders' Equity	2005		2004
Current liabilities: Current installments of long-term debt and capital lease obligations	$	5,919	$	5,973
Trade accounts payable	102,774		90,751
Accrued payroll, bonus and other benefits due team members	124,991		100,536
Dividends payable	16,858		9,361
Other accrued expenses	153,734		128,329
Total current liabilities	404,276		334,950
Long-term debt and capital lease obligations, less current installments	13,369		164,770
Deferred rent liability	87,874		70,067
Other long-term liabilities	1,404		1,581
Deferred income taxes	7,736		7,693
Total liabilities	514,659		579,061
Shareholders' equity: Common stock, no par value, 300,000 and 150,000 shares authorized; 67,431 and 62,771 shares issued; 67,277 and 62,407 shares outstanding in 2005 and 2004 respectively	797,394		535,107
Accumulated other comprehensive income	3,147		2,053
Retained earnings	517,747		431,495
Total shareholders' equity	1,318,288		968,655
Commitments and contingencies
Total liabilities and shareholders' equity	$	1,832,947	$	1,547,716

Whole Foods Market, Inc.
Consolidated Statements of Cash Flows (unaudited)
(In thousands)

	Forty weeks ended
	July 3, 2005		July 4, 2004
Cash flows from operating activities Net income	$	131,599	$	103,655
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	102,733		87,086
Loss on disposition of assets	4,842		1,444
Deferred income tax expense (benefit)	43		(2,153)
Tax benefit related to exercise of employee stock options	42,358		32,527
Interest accretion on long-term debt	3,977		5,775
Deferred rent	15,914		8,966
Other	4,996		3,392
Net change in current assets and liabilities:         Trade accounts receivable	1,170		(7,871)
Merchandise inventories	(20,654)		(29,224)
Prepaid expense and other current assets	(3,996)		(4,234)
Trade accounts payable	12,023		17,717
Accrued payroll, bonus and other benefits due team members	24,455		26,393
Other accrued expenses	23,325		17,797
Net cash provided by operating activities	342,785		261,270
Cash flows from investing activities Development costs of new store locations	(161,698)		(124,531)
Other property, plant and equipment expenditures	(82,159)		(83,385)
Increase in restricted cash	(9,924)		(17,939)
Increase in notes receivable	13,500		(13,500)
Payment for purchase of acquired entities, net of cash acquired	-		(20,542)
Other investing activities	-		1,231
Net cash used in investing activities	(240,281)		(258,666)
Cash flows from financing activities Dividends paid	(37,850)		(18,313)
Issuance of common stock	70,885		55,340
Payments on long-term debt and capital lease obligations	(5,872)		(10,086)
Net cash provided by financing activities	27,163		26,941
Net increase in cash and cash equivalents	129,667		29,545
Cash and cash equivalents at beginning of period	198,377		165,779
Cash and cash equivalents at end of period	$	328,044	$	195,324
Supplemental disclosure of cash flow information:     Interest paid	$	910	$	1,472
Federal and state income taxes paid	$	48,431	$	48,569
Non-cash transactions:     Common stock issued in connection with acquisition	$	-	$	16,375

Whole Foods Market, Inc.
Non-GAAP Financial Measures (unaudited)
(In thousands)

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides information regarding Economic Value Added (“EVA”) in the press release as additional information about its operating results. This measure is not in accordance with, or an alternative to, GAAP. The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses this measure for reviewing the financial results of the Company and for incentive compensation and capital planning purposes. The following is a tabular reconciliation of this non-GAAP financial measure to GAAP net income, which the Company believes to be the most directly comparable GAAP financial measure.

	Twelve weeks ended				Forty weeks ended
EVA	July 3, 2005		July 4, 2004		July 3, 2005		July 4, 2004
Net income	$	41,716	$	31,763	$	131,599	$	103,655
Provision for income taxes	27,811		21,174		87,733		69,103
Interest expense and other	4,093		1,779		9,408		8,768
NOPBT	73,620		54,716		228,740		181,526
Income taxes (40%)	29,448		21,886		91,496		72,610
NOPAT	44,172		32,830		137,244		108,916
Capital Charge	33,802		28,937		107,154		91,619
EVA	$	10,370	$	3,893	$	30,090	$	17,297

— EVA® is a registered trademark of Stern Stewart & Co.

About Whole Foods Market

Founded in 1980 in Austin, Texas, Whole Foods Market® is a Fortune 500 company and the largest natural and organic foods retailer. The Company had sales of $5.6 billion in fiscal year 2006 and currently has 188 stores in the United States, Canada and the United Kingdom.

The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties, which could cause our actual results to differ materially from those described in the forward looking statements. These risks include but are not limited to general business conditions, the timely development and opening of new stores, the impact of competition, and other risks detailed from time to time in the Company's SEC reports, including the reports on Form 10-K and 10-K/A Amendment No. 1 for the fiscal year ended September 25, 2005. The Company does not undertake any obligation to update forward-looking statements.