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Whole Foods Getting Ready to Brew Its Own Beer

NEW YORK (TheStreet) -- Whole Foods Market (WFM) -- the upscale supermarket chain known for its organic food  -- is planning to bring an in-house brewery and bar into a new store in Houston in an effort to boost growth and perhaps lift its sagging stock.

The company is recruiting a brewmaster who can create an in-house Whole Foods beer. If the beer is successful, it may be sold in Whole Foods stores nearby. And although Whole Foods doesn't have plans now for a national rollout, I believe that could happen.

Shares of Whole Food, which closed Tuesday at $52.17, have fallen 9.8% so far this year and trade at about 35 times trailing earnings.

Whole Foods had 373 stores at the end of the first quarter, with 107 new stores in its backlog. The company believes there is potential for 1,200 Whole Foods stores in the U.S.

Sales growth is still strong. In its fiscal first quarter ended Jan. 19, sales increased 10% to $4.24 billion on new store openings and same-store sales growth of 5.4%

Analysts estimate that earnings for Whole Foods' fiscal year ending Sept. 29 will hit $1.62 a share, up from $1.50 a share in the company's latest fiscal year, and that revenue will rise 11.2% to $14.4 billion. In fiscal 2015, sales are expected to reach $16.3 billion, another double-digit increase. 

At the time of publication, the author had no position the stock mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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