Whole Foods down 23% on disappointing earnings report


organicShares of Whole Foods Market Inc. (NASDAQ:WFMI) tumbled more than 23% by midday in heavy trading to $46. Indications of this happening could already be seen yesterday in after-hours and this morning in pre-market trading as WFMI shares lost more than 17%.

**More recent news on Whole Foods**
Organics are bad for you, financially
Whole Foods $100 million stock buyback

Yesterday, the organic and natural foods retailer reported earnings of $39.8 billion, or 28 cent per share, a significant rise from last year's $9 million or 6 cents a share. Revenues also rose from $1.12 billion in the same period last year to $1.29 billion. Analysts were expecting $1.32 billion. Also same-stores sales rose 8.6%, but that is after a good run of double digits growth. To top it all, the company warned of slower growth in sales next year.

So despite what may sound as good growth for a retailer, it doesn't come close to the growth rate WFMI has experienced so far. It is also below what analysts had expected and worse, the outlook for 2007 is below estimates as well. This has caused analysts to warn that slowing consumer spending combined with tougher competition from mainstream grocery stores (remember even Wal-mart Stores, Inc. (NYSE:WMT) is now getting into organics) could squeeze Whole Foods. Alas, no more double-digit same-store sales figures in the foreseeable future.

Already B of A cut rating from "buy" to "neutral" and lowered the target price from $77.50 to $43. Morgan Stanley cut its price target on WFMI from $70 to $63.

If this continues, I wonder whether WFMI would cut prices enough for more people to shop there.

Reader Comments (Page 1 of 2)

Symbol Lookup
IndexesChangePrice
DJIA-89.2312,801.23
NASDAQ-23.352,903.88
S&P 500-9.311,342.64

Last updated: February 12, 2012: 11:43 PM

Hot Stocks

General Electric

18.875-0.255(-1.33)

Alcoa

10.29-0.35(-3.29)

Apple Inc

493.42+0.25(+0.05)

Google Inc 'A'

605.91-5.55(-0.91)

Bank of America

8.07-0.11(-1.34)

Wal-Mart Stores

61.90-0.06(-0.10)

Exxon Mobil Corp

83.80-1.08(-1.27)

Ford

12.44-0.25(-1.97)

Citigroup

32.925-0.735(-2.18)

IBM

192.42-0.71(-0.37)

Yahoo

16.14+0.14(+0.88)

Starbucks

48.82-0.38(-0.77)

Microsoft

30.495-0.275(-0.89)

Home Depot

45.33+0.06(+0.13)

DailyFinance Headlines

Benzinga Headlines

TheFlyOnTheWall.com Headlines

BioHealth Investor Headlines

WalletPop Headlines

DailyFinance BlackBerry App

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

BloggingStocks Partners

More from AOL Money & Finance

BioHealth Investor Headlines

Page Loaded in 1329108228279 ms.