Whole Foods Market, Inc. WFM reported second-quarter fiscal 2016 results, delivering its second straight quarter of positive earnings surprise, buoyed by cost control endeavors undertaken by management. This natural and organic foods supermarket chain posted quarterly earnings of 44 cents a share that beat the Zacks Consensus Estimate of 41 cents and were flat with the year-ago quarter.The company’s top line improved 1.3% year over year to $3,696 million but fell short of the Zacks Consensus Estimate of $3,739 million.Whole Foods, which carries a Zacks Rank #4 (Sell), saw its comparable-store sales (comps) decline 3% in the reported quarter. During the first three weeks of the third quarter of fiscal 2016, comps dropped 2.6%. Analysts believe that intense competition has been weighing upon the company’s performance.Whole Foods has been revamping its pricing strategy and concentrating on value offerings in view of heightened competition as more companies are entering and expanding their presence in the Organic & Natural food business. These players include The Kroger Co. KR, Sprouts Farmers Market, Inc. SFM and Wal-Mart Stores Inc. WMT.We note that this Austin, TX-based company is leaving no stone unturned to reach its target customers, whether through national marketing and branding campaigns, home delivery services, store expansion, or the adoption of a digital route such as the launch of digital coupon within its Whole Foods Market mobile app. Moreover, it introduced a new “uniquely-branded store concept”, "365 by Whole Foods Market". The new chain will be equipped with innovative technology, compelling products at value prices and a much modern look to target millennials and stave off competition.With the launch of the “365” smaller format sister chain, Whole Foods intends to turn things around in its favor. However, analysts are concerned whether the new store model will prove to be a game changer and help Whole Foods retain market share amid stiff competition without cannibalizing its own business.For quite some time now, Whole Foods has been working on lowering prices, upgrading technology and containing costs. As part of this strategy, the company had reduced its headcount by a significant number.During the quarter under review, adjusted EBITDA decreased marginally by 0.5% to $377 million, while adjusted EBITDA margin contracted 20 basis points to 10.2%.Store UpdateWhole Foods currently operates 446 stores in the U.S., Canada, and the U.K. The company opened 8 new outlets during the reported quarter. In the third quarter of fiscal 2016, the company has opened 5 new outlets, and plans to open 7 more stores, comprising the first “365 by Whole Foods Market” store, slated to open on May 25 in Silver Lake, CA. In the final quarter of fiscal 2016, the company intends to open 5 more stores, including 2 “365 by Whole Foods Market” stores in Lake Oswego, OR and Bellevue, WA. Moreover, it believes that there exists room for 1,200 Whole Foods Market stores in the U.S. in the long run.Other Financial DetailsWhole Foods ended the quarter with cash and cash equivalents of $805 million, total long-term debt and capital lease obligations of $1,052 million, and shareholders’ equity of $3,285 million.During the quarter, Whole Foods generated cash flow from operations of $343 million and incurred capital expenditures of $159 million, resulting in free cash flow of $184 million. For fiscal 2016, management anticipates capital expenditures of 5% of sales.The company paid $44 million in quarterly dividends and bought back $100 million worth of shares. Following the end of the second quarter, the company bought back $50 million worth of shares. The company has $603 million remaining under its share repurchase authorization.Guidance at a GlanceWhole Foods now projects sales growth of up to 3% for fiscal 2016, reflecting comps decline of up to 2%. Management anticipates EBITDA margin of about 8.5% and ROIC of over 13.5%. The company now envisions earnings per share of up to $1.53 for the current fiscal.Management had earlier projected sales growth of about 3%–5%, reflecting comps between flat and a 2% decline, and earnings of $1.53 per share or higher for fiscal 2016.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report WAL-MART STORES (WMT): Free Stock Analysis Report KROGER CO (KR): Free Stock Analysis Report SPROUTS FMR MKT (SFM): Free Stock Analysis Report WHOLE FOODS MKT (WFM): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research