This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Whole Foods Plunges on Earnings Miss

NEW YORK (TheStreet) - Investors are spooked by Whole Foods Market (WFM).

Shares were dropping 5.5% to $52.39 in after-hours trading, as the organic and specialty foods store missed on both profit and revenue estimates and posted store comparable sales growth numbers that were softer than last year, further fueling Wall Street's thesis that Whole Foods is having a tough time against competition. It's likely that the rough winter is hurting traffic and sales.

The Austin, Texas-based company said Wednesday it earned a profit of $158 million, or 42 cents a share for its fiscal first quarter ending Jan. 19, compared to consensus estimates of 44 cents a share. Revenue also came in light at $4.24 billion, up 10% from the year-earlier quarter, compared to the $4.29 billion expected by analysts, according to Thomson Reuters.

Comparable store sales rose 5.4% in the quarter compared to 7.2% growth the prior year's quarter. Whole Foods said comps for the second quarter so far through Feb. 9 were up 5.6%. The company had 373 stores at quarter's end.

Whole Foods tightened its 2014 outlook. It now expects sales growth of 11% to 12% compared to 11% to 13% previously. The company is expecting comparable store sales growth of 5.5% to 6.2% compared to 5.5% to 7%, previously. It expects earnings per share ranging from $1.58 a share to $1.65 a share, down from $1.65 a share to $1.69 a share.

"The company is lowering the top end of its sales growth ranges based on year-to-date trends. Additionally, the lower end of the company's sales and earnings guidance reflects a year-over-year decrease in gross margin for the remainder of the year, while the high end assumes gross margin is relatively flat, reflecting the company's ongoing value strategy and a tough 36.2% year-ago comparison," the company said in a release. "Higher G&A expenses are due primarily to increased spending on technology, and higher pre-opening expenses are due primarily to pre-opening rent associated with the recent acquisition of seven former Dominick's locations, which will remain closed for remodeling in 2014."

Whole Foods opened 10 stores in the first quarter and two more so far in the second and one more opening in the quarter. It expects to have a total of 20 to 25 new stores open in the second half of the year.

Whole Foods co-CEO Walter Robb said that the company expects to hit the 500-store milestone in 2017.

"Over the longer term, we see demand for 1,200 Whole Foods Market stores in the U.S. alone," he said in the release.

--Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,118.46 +66.73 0.39%
S&P 500 1,984.42 +10.79 0.55%
NASDAQ 4,457.6960 +32.9920 0.75%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs