Whole Foods Earnings Beat, Smaller Stores and Return to One CEO Could Lead to a Turnaround

Shares of Whole Foods Market (WFM)  were roughly flat in Thursday trading following a quarterly earnings beat and news that the company's founder will be reinstated as its sole CEO. The stock price had been up earlier in the day. 

This year has been a bumpy or Whole Foods and its investors, with its stock chart resembling a rocky mountain range. Since July, shares have seen a drop-off of about 17% as the company struggles with sales.

The eating habits of Americans have trended toward natural food free of artificial ingredients and preservatives. This is Whole Foods' niche, but other bricks-and-mortar stores, such as Kroger, and uber-convenient grocery shopping websites such as Amazon have been able to undercut Whole Foods' often-lofty prices. When even Wal-Mart is increasing its organic grocery and produce sections, natural foods have definitely gone "mainstream."

Whole Foods has been losing its market share.

The company has seen five consecutive quarters of falling sales. That includes the most recent, fourth quarter, for which the company reported on Wednesday. During the period, same-store sales fell by 2.6%, a bigger decrease than the 2% that analysts had been expecting.

However, investors were pleased with fourth-quarter earnings of $88 million, or 28 cents per share, on $3.50 billion in revenue. Wall Street had been calling for earnings per share of 24 cents on $3.50 billion in revenue.

But investors were also happy with the announcement that Whole Foods will reinstate its founder, John Mackey, as sole CEO of the company.

If you liked this article you might like

Cramer: Food Stocks Are Going Hungry

Amazon Teams With Food Delivery Service to Launch Amazon Restaurants

Target Is Taking on the Big Guys

This Walmart Concept Just Saw the Most New Visitors in Over 3 Years

Boeing Flies Dow to Another Record Close, S&P 500 and Nasdaq Miss Out