When considering opposing ends of the food spectrum, you might expect the lower-priced brand would perform better in the current economic climate. But that's why they play the capitalism game in the markets -- and not just in the forecast sheets.
Whole Foods Market
proved as much yesterday, when it posted an unexpected gain in its third quarter and raised its full-year outlook -- in a major hint that consumers might no longer be afraid to drop disposable income on free-range chicken and organic arugula.
The news sent shares in the company soaring 21% to $29.99 in morning trading on Wednesday.
During the quarter, the company reported a profit of $35 million, or 25 cents a share, compared with $33.9 million, or 24 cents, in the year-ago period. Analysts expected earnings of 21cents.
Sales grew 2% to $1.9 billion, but same-store sales fell 3.8%.
Whole Foods raised its full-year outlook to 80 cents to 82 cents a share, up from a prior forecast of 76 cents a share.
On the other end of the spectrum,
reported an 11% jump in second-quarter earnings, but saw its revenue slip -- hurt by the strength of the dollar, which weighed on international sales.
While Kraft's earnings beat expectations and the company also raised its full-year outlook, shares still fell over 1% to $27.95 in morning trading.
During the quarter, the company earned $827 million, or 56 cents a share, compared with $745 million, or 49 cents, in the year-ago period.
Revenue declined 6% to $10.16 billion, as currency exchange rates hurt results by 8.1 percentage points.
The company now expects to earn about $1.93 a share in 2009, up from previous guidance of $1.88 a share.
-- Reported by Jeanine Poggi from New York.
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