Whole Foods Reaps Wild Oats

Sales rose to $1.87 billion from $1.66 billion, while same-store sales increased 7%.

Analysts polled by Thomson Financial expected earnings of 41 cents a share and sales of $1.89 billion.

"Given our record store development pipeline, continued anticipated acceleration in store openings, and now the announcement of our pending merger with Wild Oats Markets, we believe we are even better positioned to achieve our goal of $12 billion in sales in fiscal year 2010," Mackey said. "Over the longer term, however, we believe our sales potential is much greater as the market continues to grow and as our company continues to improve."

Wild Oats' largest shareholder, Ron Burkle's Yucaipa Cos., has agreed to tender its 18% stake in the deal. Whole Foods expects the purchase to close in April.

After the deal closes, Whole Foods plans to evaluate each banner as well as each store to see how it fits into its overall brand and real estate strategy. The company expects to make significant investments in remodeling stores before eventually re-branding them as Whole Foods Market stores.

Shares of Whole Foods recently were up $2.40 to $48.10 in after-hours trading. Wild Oats shares were surging $2.71, or 17%, to $18.43.