Press Release

Whole Foods Market Reports Third Quarter Results

Diluted EPS Increase 27% to $0.37 on 18% Sales Increase; Comparable Stores Sales Increase 9.9% on Top of 15.2% Increase in Prior Year; Company Expects Fiscal Year 2007 Growth in Operating Income before Pre-opening in Line with Sales Growth

July 31, 2006. Whole Foods Market, Inc. (NASDAQ: WFMI) today reported sales and earnings for the 12-week quarter ended July 2, 2006. For the quarter, sales increased 18% to $1.3 billion driven by 14% weighted average square footage growth and 9.9% comparable store sales growth. Sales in identical stores (excluding two relocated stores and one major expansion) increased 9.6%. Net income increased 33% to $53.9 million, diluted earnings per share increased 27% to $0.37, operating cash flow per share was $0.86, and Economic Value Added (EVA®) improved $11.0 million to $20.6 million. These results include approximately $1.4 million in non-cash share-based compensation expense and approximately $3.7 million in pre-tax credits for insurance proceeds and other adjustments related to Hurricane Katrina.

For the 40-week period ended July 2, 2006, sales increased 20% to $4.3 billion driven by 14% weighted average square footage growth and comparable store sales growth of 11.7%. Sales in identical stores (excluding four relocated stores and one major expansion) increased 10.9%. Net income increased 29% to $164.0 million, diluted earnings per share increased 21% to $1.13, operating cash flow per share was $2.35, and Economic Value Added (EVA) improved $28.5 million to $56.1 million. These results include approximately $4.5 million in non-cash share-based compensation expense and approximately $7.2 million in pre-tax credits for insurance proceeds and other adjustments related to Hurricane Katrina.

The following table shows the Company's growth in sales, comparable store sales, and square footage year to date compared to its historical five-year ranges and average results, highlighting the Company's strong historical and year-to-date performance.

	Five-Year FY Range:    Low	High	Five-Year FY Average	FY06 YTD
Sales growth	17.0%	22.8%	20.7%	20.4%
Comparable store sales growth	8.6%	14.9%	11.1%	11.7%
Two-year comps (sum of two years)	17.8%	27.8%	21.4%	24.3%
Weighted average square footage growth	9%	17%	14%	14%

"We are very pleased to report 9.9% comparable store sales growth for the quarter given our tough 15.2% comparison in the prior year. This translates to a 25.1% two-year comp in the third quarter, the highest we have produced this year," said John Mackey, chairman, chief executive officer, and co-founder of Whole Foods Market. "We continue to expect comparable store sales growth for the full year of 10% to 12% which will mark our third year of double-digit comp sales growth."

The following table breaks out additional information on the quarter for comparable stores and all stores, highlighting the Company's strong performance throughout its store base.

Comparable Stores	Average Size	Average Comps	NOPAT ROIC*	# of Stores
Over 11 years old	28,700	7.4%	87%	45
Between eight and 11 years old	29,600	7.8%	80%	35
Between five and eight years old	32,400	8.9%	49%	39
Between two and five years old	36,900	12.8%	30%	37
Less than two years old (includes four relocations)	45,000	18.6%	9%	14
All comparable stores (7.7 years old, average age s.f. adjusted)	32,900	9.9%	46%	170
All stores (6.9 years old, average age s.f. adjusted)	34,000	39%	183

*Includes pre-opening expense

Gross profit consists of sales less cost of goods sold and occupancy costs plus the contribution from non-retail distribution and food preparation operations. Gross profit improved four basis points to 35.3% of sales. These results include a $0.9 million credit for inventory adjustments related to Hurricane Katrina and a LIFO charge of $0.8 million versus no charge in the third quarter last year. For stores in the comparable store base, gross profit improved 26 basis points to 35.4% of sales.

Direct store expenses improved 15 basis points to 25.1% of sales. Direct store expenses include a $1.2 million credit for asset adjustments related to Hurricane Katrina. For stores in the comparable store base, direct store expenses improved 54 basis points to 24.6% of sales.

G&A expenses improved 21 basis points to 3.3% of sales.

The following table shows the Company's year-to-date results for certain line items as a percentage of sales compared to its historical five-year ranges and average results, highlighting that these results have been very consistent on an annualized basis over time.

Historical and Current Performance	Five-Year FY Range:    Low	High	Five-Year FY Average	FY06 YTD
Gross profit	34.2%	35.1%	34.7%	35.0%
Direct store expenses	25.2%	26.0%	25.5%	25.3%
G&A	3.1%	3.6%	3.3%	3.2%

Pre-opening and relocation costs were $7.9 million of which approximately $5.1 million was pre-opening rent and approximately $1.6 million was accelerated depreciation related to relocations.

Net interest and other income increased $2.9 million to $5.6 million. Interest and other income includes $1.6 million of business-interruption insurance proceeds related to Hurricane Katrina.

Including $1.4 million in pre-tax share-based compensation expense, net income increased 33% to $53.9 million or 4.0% of sales, and fully diluted earnings per share increased 27% to $0.37.

During the quarter, the Company produced $125 million in cash flow from operations, received $41 million in proceeds from the exercise of stock options and paid approximately $21 million to shareholders in cash dividends. Year to date, the Company has produced $342 million in cash flow from operations, received $209 million in proceeds from the exercise of stock options and paid approximately $337 million to shareholders in cash dividends.

Capital expenditures in the quarter were $74 million of which $45 million was for new stores and $29 million was for remodels and other. Capital expenditures year to date have totaled $198 million of which $111 million was for new stores and $86 million was for remodels and other. During the quarter, the Company retired its senior notes making the final $5.7 million principal payment in May. The Company's total cash and investments were approximately $397 million at the end of the quarter, and total long-term debt consisting primarily of zero coupon convertible debentures was approximately $9 million.

At July 2, 2006, the Company had investments in short-term variable rate demand obligations (VRDOs) totaling approximately $274 million included in "short-term investments - available-for-sale securities" on the accompanying balance sheet. These investments are generally tax-free municipal obligations with contractual maturities of less than 90 days. Historically, most companies have classified investments in VRDOs as cash equivalents due to their liquidity. Based on information about a recent clarification of the preferred balance sheet classification of VRDOs, the Company has elected to classify its VRDO investments in "short-term investments."

New Store Development
In the third quarter, the Company opened one new store in Greenville, SC and closed a 2,600 square foot Fresh & Wild store in the U.K. In the fourth quarter, the Company plans to open four stores averaging 58,000 square feet in size, one of which is a relocation. Three of these stores are expected to open at the end of the quarter.

The Company continues to add to its store development pipeline with the recent signing of eight new store leases averaging 55,000 square feet in size which are as follows: Dublin, CA; Oxnard, CA; Los Angeles, CA; Denver, CO; Connecticut; Florida; Schaumburg, IL; and New Jersey. In addition, the Company has signed a lease to expand its store in Boulder, CO from 39,000 square feet to 74,000 square feet.

The following table provides additional information about the Company's new store openings over the last four quarters, leases currently tendered, and store development pipeline for stores scheduled to open through fiscal year 2009.

New Store Information	Stores Opened Last Four Qtrs	Leases Tendered	Leases Signed*
Number of stores (including relocations)	14	14	86
Number of relocations	1	2	16
New markets	6	2	17
Average store size (gross square feet)	50,400	53,900	55,400
As a percentage of existing store average size	148%	159%	163%
Total square footage	705,000	755,000	4,847,000
As a percentage of existing square footage	11%	12%	78%
Average pre-opening expense per store	$2.1 million	-	-
Average tender period	9.6 months	-	-

*Includes leases tendered

Growth Goals for Fiscal Year 2006
For fiscal year 2006, the Company expects sales growth in the range of 18% to 21%, comparable store sales growth of 10% to 12%, and weighted average square footage growth in line with its 14% historical average.

The Company expects non-cash share-based compensation expense of approximately $2 million to $3 million and pre-opening and relocation costs of approximately $13 to $15 million in the fourth quarter.

Capital expenditures for the year are now expected to be in the range of $310 million to $330 million.

Based on the Company's better-than-expected year-to-date diluted earnings per share of $1.13, the Company now expects diluted earnings per share growth in fiscal year 2006 to be in line with or slightly higher than sales growth. As previously stated, this guidance excludes the $16.5 million in costs relating to Hurricane Katrina in fiscal year 2005, share-based compensation expense in fiscal years 2005 and 2006, and uses a 40% tax rate in both years.

Growth Goals for Fiscal Year 2007 and Beyond
The Company notes that fiscal year 2007 will be a 53-week year, with the fifty-third week occurring in the fourth quarter. For fiscal year 2007, on a 52-week to 52-week basis, the Company expects total sales growth of 15% to 20%.

The Company expects growth in operating income before pre-opening and relocation costs to be in line with sales growth.

Ten of the Company's 14 tendered stores, representing approximately 520,000 square feet, are expected to open in fiscal year 2007. This 520,000 square feet is equal to roughly 78% of the square footage expected to open in all of fiscal year 2006, and the Company expects to announce additional stores tendered for openings in 2007 over the next two quarters.

The anticipated acceleration in leases tendered and square footage opening in 2007 is expected to result in materially higher pre-opening and relocation expense year over year which, in turn, is expected to impact the Company's diluted earnings per share growth.

Longer term, the Company's goal is to reach $12 billion in sales in 2010.

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 $4.7 billion in fiscal year 2005 and currently has 183 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.

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

	Twelve weeks ended				Forty weeks ended
	July 2, 2006		July 3, 2005		July 2, 2006		July 3, 2005
Sales	$	1,337,886	$	1,132,736	$	4,316,359	$	3,586,222
Cost of goods sold and occupancy costs	866,260		733,931		2,806,298		2,327,103
Gross profit	471,626		398,805		1,510,061		1,259,119
Direct store expenses	335,555		285,804		1,090,463		910,497
Store contribution	136,071		113,001		419,598
General and administrative expenses	43,955		39,618		138,265		114,792
Operating income before pre-opening	92,116		73,383		281,333		233,830
Pre-opening and relocation costs	7,860		8,777		23,675		25,641
Operating income	84,256		64,606		257,658		208,189
Other income (expense): Interest expense	(8)		(163)		(11)		(2,213)
Investment and other income	5,581		2,868		15,731		6,175
Income before income taxes	89,829		67,311		273,378		212,151
Provision for income taxes	35,931		26,924		109,351		84,860
Net income	$	53,898	$	40,387	$	164,027	$	127,291
Basic earnings per share	$	0.38	$	0.31	$	1.18	$	0.99
Weighted average shares outstanding	140,712		131,797		139,062		128,625
Diluted earnings per share	$	0.37	$	0.29	$	1.13	$	0.93
Weighted average shares outstanding, diluted basis	145,925		140,745		145,567		139,160
Dividends per share	$	0.15	$	0.13	$	2.45	$	0.35

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 2, 2006		July 3, 2005		July 2, 2006		July 3, 2005
Net income (numerator for basic earnings per share)	$	53,898	$	40,387	$	164,027	$	127,291
Interest on 5% zero coupon convertible subordinated debentures, net of income taxes	61		483		225		2,441
Adjusted net income (numerator for diluted earnings per share)	$	53,959	$	40,870	$	164,252	$	129,732
Weighted average common shares outstanding (denominator for basic earnings per share)	140,712		131,797		139,062		128,625
Potential common shares outstanding:   Assumed conversion of 5% zero coupon convertible   subordinated debentures	335		2,752		378		4,284
Assumed exercise of stock options	4,878		6,196		6,127		6,251
Weighted average common shares outstanding and   potential additional common shares outstanding   (denominator for diluted earnings per share)	145,925		140,745		145,567		139,160
Basic earnings per share	$	0.38	$	0.31	$	1.18	$	0.99
Diluted earnings per share	$	0.37	$	0.29	$	1.13	$	0.93

Whole Foods Market, Inc.
Consolidated Balance Sheets
July 2, 2006 and September 25, 2005
(In thousands)

Assets	2006		2005
Current assets: Cash and cash equivalents	$	47,745	$	308,524
Short-term investments - available-for-sale securities	274,728		-
Restricted cash	59,371		36,922
Trade accounts receivable	68,770		66,682
Merchandise inventories	209,151		174,848
Deferred income taxes	51,899		39,588
Prepaid expenses and other current assets	31,282		45,965
Total current assets	742,946		672,529
Property and equipment, net of accumulated depreciation and amortization	1,137,768		1,054,605
Long-term investments - available-for-sale securities	15,121		-
Goodwill	113,494		112,476
Intangible assets, net of accumulated amortization	35,308		21,990
Deferred income taxes	29,214		22,452
Other assets	4,954		5,244
Total assets	$	2,078,805	$	1,889,296
Liabilities And Shareholders' Equity	2006		2005
Current liabilities: Current installments of long-term debt and capital lease obligations	$	97	$	5,932
Trade accounts payable	120,710		103,348
Accrued payroll, bonus and other benefits due team members	150,618		126,981
Dividends payable	21,177		17,208
Other current liabilities	228,261		164,914
Total current liabilities	520,863		418,383
Long-term debt and capital lease obligations, less current installments	8,538		12,932
Deferred rent liability	107,480		91,775
Other long-term liabilities	84		530
Total liabilities	636,965		523,620
Shareholders' equity: Common stock, no par value, 300,000 shares authorized;   141,689 and 136,017 shares issued; 141,181 and 135,908   shares outstanding in 2006 and 2005, respectively	1,125,371		874,972
Accumulated other comprehensive income	7,002		4,405
Retained earnings	309,467		486,299
Total shareholders' equity	1,441,840		1,365,676
Commitments and contingencies
Total liabilities and shareholders' equity	$	2,078,805	$	1,889,296

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

	Forty weeks ended
	July 2, 2006		July 3, 2005
Cash flows from operating activities Net income	$	164,027	$	127,291
Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization	118,648		101,009
Loss (gain) on disposition of assets	(1,001)		4,844
Share-based compensation	4,383		1,742
Deferred income tax expense (benefit)	(19,073)		(1,943)
Excess tax benefit related to exercise of employee stock options	(55,494)		42,358
Interest accretion on long-term debt	367		3,977
Deferred rent	13,547		15,914
Other	595		5,197
Net change in current assets and liabilities: Trade accounts receivable	(2,089)		1,170
Merchandise inventories	(37,303)		(20,654)
Prepaid expense and other current assets	(5,749)		(3,996)
Trade accounts payable	17,362		12,023
Accrued payroll, bonus and other benefits due team members	23,637		24,455
Other accrued expenses	120,161		20,494
Net cash provided by operating activities	342,018		333,881
Cash flows from investing activities Development costs of new store locations	(111,482)		(152,794)
Other property, plant and equipment expenditures	(86,335)		(82,159)
Acquisition of intangible assets	(16,204)		-
Purchase of available-for-sale securities	(497,071)		-
Sale of available-for-sale securities	209,110		-
Increase in restricted cash	(22,449)		(9,924)
Decrease in notes receivable	-		13,500
Net cash used in investing activities	(524,431)		(231,377)
Cash flows from financing activities Dividends paid	(336,889)		(37,850)
Issuance of common stock	208,641		70,885
Excess tax benefit related to exercise of employee stock options	55,494		-
Payments on long-term debt and capital lease obligations	(5,612)		(5,872)
Net cash provided by (used in) financing activities	(78,366)		27,163
Net change in cash and cash equivalents	(260,779)		129,667
Cash and cash equivalents at beginning of period	308,524		194,747
Cash and cash equivalents at end of period	$	47,745	$	324,414
Supplemental disclosure of cash flow information:   Interest paid	$	531	$	910
Federal and state income taxes paid	$	18,679	$	48,431
Non-cash transactions:   Conversion of convertible debentures into common stock	$	4,910	$	147,302

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 2, 2006		July 3, 2005		July 2, 2006		July 3, 2005
Net income	$	53,898	$	40,387	$	164,027	$	127,291
Provision for income taxes	35,931		26,924		109,351		84,860
EVA adjustments*	4,176		4,091		10,780		9,409
NOPBT	94,005		71,402		284,158		221,560
Income taxes (40%)	37,602		28,561		113,663		88,624
NOPAT	56,403		42,841		170,495		132,936
Capital Charge	35,815		33,225		114,413		105,310
EVA	$	20,588	$	9,616	$	56,082	$	27,626

* GAAP amounts not included in EVA include interest expense, gains and losses on the disposition of assets, accelerated depreciation and share-based compensation.

— 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.