Whole Foods' Stock Price Has Me Dancing in the Aisles

Whole Foods' mission statement, entitled "Whole Foods, Whole People, Whole Planet," promises to provide more than just food. "Our success in fulfilling our vision is measured by customer satisfaction, Team Member excellence and happiness, return on capital investment, improvement in the state of the environment, and local and larger community support," says its Website.

In question right now is Whole Foods' return on capital investment. Its less-than-great acquisition of Wild Oats attributed to a loss of $8.6 million in the second quarter, according to the company's latest earnings filings. Further, its ramp up in store openings -- up to 30 more in 2009 -- has some downside risk and could potentially hurt the stock in the near-term, analysts worry. Credit Suisse, for example, projects Whole Foods' accelerated expansion would stump growth by 8% year-over-year.

For now, as the company builds further out, some are concerned about whether its decentralized model of management -- where every geographic division has its own president and all product sourcing is done locally -- will and can adjust to its larger size. "To manage the new stores coming on-line, Whole Foods may need to look outside the company for experienced people," says Corwin, and aim to become more centralized.

On a positive managerial note, it appears executives are aware of Whole Foods' growing pains, exemplified by its trimming of square footage on some soon-to-built stores. As for Mackey, his message board scandal doesn't threaten the company's future, adds Corwin. "That speaks to something other than the execution of the business," he says. "Whole Foods has a deep understanding of the culture that's different from its peers."