NEW YORK (TheStreet) -- Shares of Whole Foods Market (WFM) were dropping 5.03% to $49.63 on heavy trading volume late Wednesday morning after Sprouts Farmers Market (SFM), a competing specialty foods retailer, reduced its same-store sales guidance.
For the third quarter, Sprouts Farmers Market projects flat comparable-store sales vs. prior views for growth between 3% and 4%.
For the full year, the company expects same-store sales to increase between 1.5% to 2.5%, down from its previous outlook of a rise between 3.5% to 4.5%.
Sprouts Farmers Market said the company is experiencing "significant ongoing deflation" in an environment that is increasingly more competitive, according to a statement.
Oppenheimer advised short-term investors to avoid supermarket chains in general following Sprouts' report, according to a note cited by the Fly.
The firm said grocery chains like Sprouts Farmers Market and Austin-based Whole Foods could see a greater drop in stock price, and any gains might be "limited."
More than 9.27 million of Whole Foods' shares have traded so far today vs. the 30-day average volume of 5.74 million shares.
Separately, TheStreet Ratings objectively rated Whole Foods Market stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings Whole Foods Market stock as a "hold" with a ratings score of C.
The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
You can view the full analysis from the report here: WFM