This Day On The Street
Continue to site
ADVERTISEMENT
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

Whole Foods Plunges: What Wall Street's Saying

NEW YORK (TheStreet) - Whole Foods Market WFM shares were plunging 19.5% to $38.63 after the specialty foods grocery sharply reined in expectations for the fiscal year as competition heats up, especially since Walmart (WMT) intends to be a player in the natural and organic food space.

Whole Foods shares hit an intraday 52-week-low on Wednesday of $37.31. More than 25 million shares were traded by mid-day, as investors got spooked from last night's earnings report.

Whole Foods reported second-quarter profit of $142 million, or 38 cents per share, for the 12-week period, ending April 13, below analysts' estimates. The average of 30 analysts' estimates was 41 cents a share, according to Bloomberg data.


WATCH: More market update videos on TheStreet TV | More videos from Jim Cramer

Sales for the quarter rose 10% to a record $3.3 billion, Whole Foods said, but once again comparable store sales growth of 4.5% slowed for the quarter compared to a 6.9% increase in last year's quarter. The company said that comps were hurt by approximately 50 basis points from the shift in the Easter holiday from the second quarter last year to the third quarter this year.

More importantly though, the Austin, Texas-based grocer slashed its annual earnings forecast, to a range of $1.52 a share to $1.56 a share from $1.58 a share to $1.65 a share, implying EPS growth for the year of just 3%-6% versus 7%-12%. Analysts estimate $1.61 per share for the year, on average.

Whole Foods now expects comparable store sales growth for its fiscal 2014 to 5-5.5% down from 5.5-6.2%. Over the long term though, Whole Foods noted that it believes that it's "growth prospects remain strong." Starting in fiscal 2015, the company's goal is to "deliver earnings per share growth equal to or in excess of sales growth." It also expects to lower gross margin to 34% to 35%.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
WFM $49.63 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs