Investors Doubt Whole Foods' Claims

(Updated with stock movements and additional analyst insight.)

NEW YORK (TheStreet) -- Has Whole Foods Market(WFMI Quote) "turned the sales corner," as its CEO suggests? Investors don't seem to think so.

Shares of the organic grocer are tanking 12% to $28.21 a day after it posted a surge in third-quarter profit.

Investors fear continued economic pressure and the price war between grocers will not bode well for the remainder of the year.

During the quarter, the company earned $28.7 million, or 20 cents a share, compared with $1.5 million, or 1 cents, in the year ago period. Analysts expected the company to earn 18 cents a share.

Sales rose 2% to $1.83 billion from $1.8 billion, while same-store sales slipped 0.9%.

"We believe our sales have stabilized and officially turned the corner," CEO John Mackey said in a statement.

The supermarket forecasts full-year earnings in the range of $1.05 to $1.10 a share. Already for the first five weeks of the first quarter, total sales jumped 5%, while same-store sales rose 1.6%, the company said.

Regardless, the sales forecast is modest -- just a 5% to 8% increase for 2010.

-- Reported by Jeanine Poggi in New York

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