Whole Foods raises dividend to offset earnings weakness

Posted Nov 21st 2007 4:11AM by Douglas McIntyre
Filed under: Earnings Reports, Whole Foods Market (WFMI)

A classic case of misdirection: Whole Foods (NASDAQ: WFMI) reported weak earnings, but raised its dividend, sending its shares up as much as 7% after hours.

Whole Foods earned $33.9 million, or 24 cents per share, in its fourth quarter, down from $39.8 million, or 28 cents per share, a year earlier. The company blamed costs of merging with Wild Oats for much of the drop. Revenue rose 35% to $1.74 billion, in large part because of the merger.

But same-store sales were up an impressive 8.2%.

All in all, the market might have been dissatisfied with the numbers and pushed down the stock, especially in an environment where weak numbers can be especially punishing to a stock's price. But Whole Foods was clever and got around that. According to TheStreet.com, WFMI "increased its dividend 11% to 20 cents per share," making the stock more attractive to investors who may have concerns about earnings.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: inthenews, wfmi, whole foods, WholeFoods

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Reader Comments (Page 1 of 1)

11-21-2007 @ 6:45AM

nancyhere said...

making the stock more attractive to investors who may have concerns about earnings.

11-21-2007 @ 6:55AM

nancyhere said...

Yes, we should make the stock more attractive to investors who may have concerns about earnings. Especilly for these poor blacks, i have met a lot of complaining blogs on bigblackconnect.com. Some members are comlaining about the price.

11-21-2007 @ 6:57AM

brian said...

That is a bit harsh and I have to question your judgement Same store sales were up 8.2%! You are saying the stock would have tanked but they pulled a fast one and raised the dividend? Obviously there were huge costs in the merger with WOats. You are in left field on this one.