NEW YORK (TheStreet) -- Specialty grocery retailer Whole Foods (WFM) , which has built a name for itself selling organic and natural foods and products, has been a disappointment to investors over the past couple of years. Not only are its shares down some 20% so far in 2015, but if you bought and held WFM stock starting three years ago, you've lost 14% on that investment. However, things are about to get better.

The Austin, Texas-based grocer will report third-quarter 2015 results Wednesday after market close. Competition from the likes of Trader Joe's and Kroger (KR) - Get Report has eaten into Whole Foods' growth. This is despite recent trends, showing consumers have moved towards healthier lifestyle and eating habits, which ordinarily would benefit a merchant like Whole Foods. But the revenue and earnings growth that could support a higher stock price have been hard to come by.

The company has begun to make changes aimed at driving luring more customers through its doors, while also lowering costs. To fight competitive pressures, Whole Foods has moved to test a smaller store model, with its millennial-focused 365 by Whole Foods Market concept, which the company says will make it more productive.

While "productive" doesn't say a lot, Whole Foods should be able to deliver higher earnings in the quarters ahead since it will be able to increase the value of its store count. Not only will Whole Foods be able keep construction costs relatively low, it can also save money on occupancy costs because of the smaller size of the stores -- thus achieving higher returns on capital.

Whole Foods' new store concept is similar to the working models of Starbucks (SBUX) - Get Report and Chipotle Mexican Grill (CMG) - Get Report, which have found ways to deliver higher earnings and same-store-sales despite selling higher priced menu items than their competitors. And these maneuvers should fuel long-term profits for Whole Foods.

For the quarter that ended June, the average analyst earnings estimate calls for 45 cents a share on revenue of $3.69 billion, translating to increases of 10% and 9%, respectively. For the full year, ending in September, earnings are projected to climb 10% to $1.72 a share, while revenue of $15.6 billion calls for a 9% climb.

The company ended its second quarter with a total of 417 stores, but has plans to grow its store count 20% in the next two years. To the extent these new stores can drive higher consumer traffic and reduce the company's long-term operating expenses, Whole Foods is setting itself up well for the next 12 to 18 months. That lends support to the stock's average 12-month price target of $47, some 17% higher than its current levels around $40.

This article is commentary by an independent contributor. At the time of publication, the author held no position in the stocks mentioned.