Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

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Tuesday, August 01, 2006

Whole Foods, Whole Paycheck, Partial Stock Price

Stock Tickers: WFMI, OATS

Whole Foods (WFMI) is trading lower this morning in pre-market trading to the tune of over 9%. The company beat EPS targets at $0.37 EPS vs $0.34 estimates, but the real issue was its revenues. It posted revenues of $1.34 Billion versus $1.36 Billion estimates. As far as guidance Whole Foods expects sales to grow 18% to 21% and EPS to rise the same or slightly more for the year-end Sept. 24. They expect comparable-store gains of 10% to 12% for the year as well. The company did signal that overall sales growth would be slightly slower in the 15% to 20% range in the following year.

The stock does have the coolness factor and the pricing power factor going for it, but this 9% drop in pre-market trading goes to show you what the risks can be in a company with a 50 P/E that has to run perfectly in every cylinder.

This is actually going to put the stock (at $52.14 pre-market) under its old 52-week lows of $54.66 and well under the year highs of $79.90.

Its closest publicly traded competitor is Wild Oats (OATS), and that is down 1.6% at $17.70 in pre-market trading. OATS reports earnings on Thursday, August 3, 2006.

Jon C. Ogg
August 1, 2006

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