Press Release

Whole Foods Market Announces Third Quarter Results

14.1% Comparable Store Sales Growth Drives 22% Sales Increase; Company Initiates Fiscal Year 2005 Guidance

July 28, 2004. Whole Foods Market, Inc. (NASDAQ: WFMI) today reported sales and earnings for the third quarter ended July 4, 2004. Sales for the 12-week quarter increased 22% to $917 million from $749 million in the prior year. This increase was driven by 9% weighted average year-over-year square footage growth and comparable store sales growth of 14.1%. Sales in identical stores (excluding two relocated stores and two major store expansions) increased 13.7% for the quarter.

Net income for the quarter increased 15% to $32.9 million from $28.7 million in the prior year, and diluted earnings per share increased 10% to $0.50 from $0.45 in the prior year. Excluding the pre-tax gain of approximately $3 million, or approximately $0.03 in diluted earnings per share, related to the distribution of proceeds from the sale of Blooming Prairie Cooperative in the prior year, net income for the quarter increased 22% and diluted earnings per share increased 17%.

Net operating profit after taxes (NOPAT) increased 12% to $34.0 million for the quarter. The Company's capital charge for the quarter was $31.1 million, resulting in Economic Value Added (EVA®) of $2.9 million.

Store Returns for the Quarter:

	Average Size	Average Comps	NOPAT ROIC	# of Comp Stores
Stores over eight years old	28,100	12.0%	59%	64
Stores between five and eight years old	31,700	11.7%	43%	26
Stores between two and five years old	36,500	14.6%	23%	36
Stores less than two years old (including relocations)	36,000	25.9%	13%	17
All stores in comparable store base	31,800	14.1%	34%	143
All stores open at the end of the third quarter	31,300		29%	160

"We are experiencing one of the best years in our company's history with sales increasing 23% to $2.9 billion, net income increasing 34% to $107 million, which is more than we earned in all of last fiscal year, and EVA improving over $10 million," said John Mackey, Whole Foods Market CEO, President, Chairman and Co-founder. "Our comparable stores are producing record sales increases of 15.2% year to date, and our new stores continue to open above our expectations producing $595,000 in average weekly sales. We believe our strong results are due in part to the growing equity of the Whole Foods Market brand and demonstrate the tremendous growth opportunities that lie ahead for our company."

In the third quarter, gross profit increased two basis points to 34.6% of sales, and direct store expenses increased 35 basis points to 25.3% of sales, resulting in a 33 basis point decrease in store contribution to 9.3% of sales. For the 143 stores in the comparable store base, gross profit improved 41 basis points to 34.9% of sales, and direct store expenses increased 10 basis points to 25.0% of sales, resulting in a 32 basis point increase in store contribution to 9.8% of sales. General and administrative (G&A) expenses decreased 19 basis points to 3.0% of sales.

In the third quarter, the Company opened five new stores in Charleston, SC; White Plains, NY; Fort Collins, CO; Bellevue, WA and Glendale, CA (a relocation), ending the quarter with 160 stores totaling approximately five million square feet. Capital expenditures in the quarter were $62 million of which $37 million was for new store development. The Company produced cash flow from operations of $57 million during the quarter.

Cash and cash equivalents, including restricted cash, totaled approximately $213 million at the end of the third quarter, and long-term debt, which includes $157 million in Zero Coupon Convertible Debentures, was approximately $168 million. On July 19, 2004, the Company paid approximately $9 million to shareholders in its third quarterly dividend of $0.15 per share.

Stores in Development

The Company is pleased to announce the recent signing of eight new store leases in Redmond, WA; New York, NY; Henderson, NV; Charlotte, NC; Cranston, RI; Woburn, MA; Manhattan Beach, CA; and Austin, TX (a relocation). The following table provides additional information about the Company's store development pipeline.

	7/28/04	7/30/03	% Change
Number	49	29	69%
Average size (gross square feet)	47,800	44,800	7%
As a percentage of existing store average size	153%	145%	-
Total square footage under development	2,351,000	1,335,000	76%
As a percentage of existing square footage	47%	30%	-

Historical Performance

Following are certain historical results as a percentage of sales for all stores for the last four fiscal years, the four-year average through fiscal year 2003, and year to date for the current fiscal year. This information is included in order to emphasize the general consistency of the Company's results as a percentage of sales over this period of time. Total sales growth, percent of sales from comparable stores, one-year comparable store sales increases and the sum of two years of comparable store sales increases (two-year comps) are also included.

	2000	2001	2002	2003	4-Year Average	2004 YTD
Gross profit	34.5%	34.8%	34.7%	34.3%	34.5%	34.8%
Direct store expenses	25.0%	25.3%	25.1%	25.2%	25.2%	25.3%
Store contribution	9.4%	9.5%	9.6%	9.2%	9.4%	9.5%
G&A (excl. goodwill amort.)	3.3%	3.6%	3.6%	3.2%	3.4%	3.1%
Sales growth	23.2%	23.6%	18.4%	17.0%	20.5%	22.5%
% of sales from comp stores	86.3%	89.0%	90.1%	91.8%	89.7%	91.3%
Comps	8.6%	9.2%	10.0%	8.6%	9.1%	15.2%
Two-year comps	16.3%	17.8%	19.2%	18.6%	18.0%	23.7%

Goals for Fiscal Year 2004

The Company expects comparable store sales growth for the fourth quarter to be in the range of 11% to 13%. This guidance range reflects the above average comparable store sales growth the Company has been experiencing this year while taking into account the tougher year-over-year comparison in the fourth quarter. The Company expects to open four new stores in the fourth quarter. Based on the Company's strong year-to-date results, sales growth for the fiscal year is expected to be at the high end of the Company's previously stated 18% to 22% range of guidance. The Company expects operating margin improvement in fiscal year 2004 primarily due to an increase in gross margin, along with slight improvements in G&A and pre-opening and relocation expenses as a percentage of sales. The Company expects diluted earnings per share for the fiscal year to be at the higher end of its previously stated $2.03 to $2.10 range of guidance.

Goals for Fiscal Year 2005

For fiscal year 2005, the Company expects total sales and earnings growth in line with its stated long-term goal of 15% to 20%. The Company expects weighted average square footage growth of approximately 15%. The Company faces difficult comparisons with regard to sales growth, comparable store sales increases, and diluted earnings per share growth due to the Company's above-average results so far in fiscal year 2004. Additionally, diluted earnings per share growth could be lower than sales growth due to an expected acceleration in square footage growth which would result in higher pre-opening expense and could have some negative impact on store contribution, as new stores generally have lower gross margins and higher direct store expenses than more mature stores.

Supplemental Information: The following pie chart depicts net income and certain expense categories, including salaries and benefits, as a percentage of sales for the twelve weeks ended July 4, 2004.

About Whole Foods Market:
Founded in 1980 in Austin, Texas, Whole Foods Market® (www.wholefoodsmarket.com) is the largest natural and organic foods retailer. The Company had sales of $3.1 billion in fiscal year 2003 and currently has 160 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 integration of acquired stores, the impact of competition, and other risks detailed from time to time in the Company's SEC reports, including the report on Form 10K for the fiscal year ended September 28, 2003. The Company does not undertake any obligation to update forward-looking statements.

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

	Twelve weeks ended				Forty weeks ended
	July 4, 2004		July 6, 2003		July 4, 2004		July 6, 2003
Sales	$	917,355	$	749,043	$	2,937,644	$	2,397,942
Cost of goods sold and occupancy costs	600,404		490,424		1,915,646		1,574,804
Gross profit	316,951		258,619		1,021,998		823,138
Direct store expenses	232,122		186,918		743,487		601,358
Store contribution	84,829		71,701		278,511		221,780
General and administrative expenses	27,551		23,930		92,203		78,395
Pre-opening and relocation costs	2,928		2,369		7,260		8,156
Operating income	54,350		45,402		179,048		135,229
Other income (expense): Interest expense	(1,319)		(1,907)		(5,656)		(6,493)
Investment and other income	1,782		4,292		4,749		4,389
Income before income taxes	54,813		47,787		178,141		133,125
Provision for income taxes	21,924		19,115		71,256		53,250
Net income	$	32,889	$	28,672	$	106,885	$	79,875
Basic earnings per share	$	0.53	$	0.48	$	1.75	$	1.36
Weighted average shares outstanding	61,951		59,752		61,019		58,749
Diluted earnings per share	$	0.50	$	0.45	$	1.64	$	1.28
Weighted average shares outstanding, diluted basis	68,446		65,811		67,461		65,180
Dividends per share	$	0.15	$	-	$	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
Net income (numerator for basic earnings per share)	$	32,889	$	28,672	$	106,885	$	79,875
Interest on 5% zero coupon convertible subordinated debentures, net of income taxes	1,092		1,042		3,598		3,429
Adjusted net income (numerator for diluted earnings per share)	$	33,981	$	29,714	$	110,483	$	83,304
Weighted average common shares outstanding (denominator for basic earnings per share)	61,951		59,752		61,019		58,749
Potential common shares outstanding:   Assumed conversion of 5% zero coupon convertible     subordinated debentures	3,280		3,285		3,281		3,285
Assumed exercise of stock options	3,215		2,774		3,161		3,146
Weighted average common shares outstanding and potential additional common shares outstanding (denominator for diluted earnings per share)	68,446		65,811		67,461		65,180
Basic earnings per share	$	0.53	$	0.48	$	1.75	$	1.36
Diluted earnings per share	$	0.50	$	0.45	$	1.64	$	1.28

Whole Foods Market, Inc.
Condensed Consolidated Balance Sheets
July 4, 2004 (unaudited) and September 28, 2003
(In thousands)

Assets		2004		2003
Current assets: Cash and cash equivalents	$	195,324	$	165,779
Restricted cash	17,939		-
Trade accounts receivable	55,349		45,947
Merchandise inventories	153,793		123,904
Prepaid expenses and other current assets	32,498		28,054
Total current assets	454,903		363,684
Property and equipment, net of accumulated depreciation and amortization	846,923		718,240
Long-term investments	-		2,206
Goodwill	112,072		80,548
Intangible assets, net of accumulated amortization	25,423		26,569
Other assets	19,495		5,573
Total assets	$	1,458,816	$	1,196,820
Liabilities and Shareholders' Equity	2004		2003
Current liabilities: Current installments of long-term debt and capital lease obligations	$	5,990	$	5,806
Trade accounts payable	95,953		72,715
Accrued payroll, bonus and employee benefits	97,283		70,875
Dividends payable	9,345		-
Other accrued expenses	108,672		90,188
Total current liabilities	317,243		239,584
Long-term debt and capital lease obligations, less current installments	163,088		162,909
Other long-term liabilities	18,871		18,151
Total liabilities	499,202		420,644
Shareholders' equity: Common stock, no par value, 150,000 shares authorized, 62,762 and 60,299 shares issued, 62,263 and 60,070 shares outstanding in 2004 and 2003, respectively	527,825		423,297
Accumulated other comprehensive income	1,307		1,624
Retained earnings	430,482		351,255
Total shareholders' equity	959,614		776,176
Commitments and contingencies
Total liabilities and shareholders' equity	$	1,458,816	$	1,196,820

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

	Forty weeks ended
	July 4, 2004		July 6, 2003
Cash flows from operating activities: Net income	$	106,885	$	79,875
Adjustment to reconcile net income to net cash provided by operating activities:   Depreciation and amortization	83,856		74,318
Loss on disposal of fixed assets	1,444		452
Rent differential	407		785
Change in LIFO reserve	2,500		1,840
Interest accretion on long-term debt	5,775		5,632
Tax benefit related to exercise of employee stock options	32,527		24,015
Impairment loss on long-term investments	479		1,412
Issuance of common stock to 401(k) plan	6		3,122
Cooperative patronage dividends received	-		3,210
Net change in current assets	(41,329)		(38,496)
Net change in current liabilities	61,907		48,437
Net cash provided by operating activities	254,457		204,602
Cash flows from investing activities:   Development costs of new store locations	(117,718)		(64,535)
Other property, plant and equipment expenditures	(83,385)		(64,346)
Acquisition of intangible assets	(584)		(6,552)
Payments for purchase of acquired entities, net of cash acquired	(20,542)		-
Increase in restricted cash	(17,939)
Increase in notes receivable	(13,500)		-
Proceeds from sale of property, plant and equipment	-		2,709
Proceeds from conversion of long-term investments	-		1,000
Proceeds from the sale of long-term investments	1,815		-
Net cash used in investing activities	(251,853)		(131,724)
Cash flows from financing activities:   Payments on long-term debt and capital lease obligations	(10,086)		(6,341)
Issuance of common stock	55,340		48,295
Dividends paid	(18,313)		-
Net cash provided by financing activities	26,941		41,954
Cash flows from discontinued operations: Net cash provided by discontinued operations	-		3,557
Net increase in cash and cash equivalents	29,545		118,389
Cash and cash equivalents at beginning of period	165,779		12,646
Cash and cash equivalents at end of period	$	195,324	$	131,035
Supplemental disclosures of cash flow information:   Interest paid	$	1,472	$	1,939
Federal and state income taxes paid	$	48,569	$	8,136

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides information regarding adjusted net income, adjusted diluted earnings per share and EVA in the press release as additional information about its operating results. These measures are not in accordance with, or an alternative to, GAAP. The Company's management believes that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to the Company's results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company and for incentive compensation and capital planning purposes. The following tables reflect reconciliations of GAAP information to non-GAAP financial measures:

	Twelve weeks ended				Forty weeks ended
	July 4, 2004		July 6, 2003		July 4, 2004		July 6, 2003
GAAP Net income	$	32,889	$	28,672	$	106,885	$	79,875
Blooming Prairie gain	-		(3,020)		-		(3,020)
Income taxes (40%)	-		1,208		-		1,208
Adjusted net income	32,889		26,860		106,885		78,063
Interest on convertible debentures, net	1,092		1,042		3,598		3,429
Adjusted net income, diluted	$	33,981	$	27,902	$	110,483	$	81,492
Adjusted diluted earnings per share	$	0.50	$	0.42	$	1.64	$	1.25
Weighted average shares outstanding, diluted	68,446		65,811		67,461		65,180
	Twelve weeks ended				Forty weeks ended
	July 4, 2004		July 6, 2003		July 4, 2004		July 6, 2003
GAAP Net income	$	32,889	$	28,672	$	106,885	$	79,875
Provision for income taxes	21,924		19,115		71,256		53,250
Interest expense and other	1,798		2,767		8,787		8,475
NOPBT	56,611		50,554		186,928		141,600
Taxes (40%)	(22,644)		(20,222)		(74,771)		(56,640)
NOPAT	33,967		30,332		112,157		84,960
Capital charge	(31,116)		(25,927)		(97,929)		(81,337)
EVA	$	2,851	$	4,405	$	14,228	$	3,623

The following tables reflect the pro forma effects of recognizing compensation cost for stock options for the twelve weeks ended:
Net income	July 4, 2004		% Sales	July 6, 2003		% Sales	%Change
Net income	$	32,889	3.6%	$	28,672	3.8%	14.7%
After-tax pro forma expense	(6,135)		0.7%	(4,852)		0.6%	26.4%
Pro forma net income	$	26,754	2.9%	$	23,820	3.2%	12.3%
Dilution	18.7%		16.9%
Earnings per share	July 4, 2004			July 6, 2003			% Change
Diluted EPS	$	0.50	$		0.45	10.0%
After-tax pro forma expense	(0.08)		(0.07)			23.3%
Pro forma diluted EPS	$	0.41	$		0.38	7.6%
Dilution	16.6%		14.8%

— 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.