Whole Foods Earnings Numbers Decay - Analyst Blog

Whole Foods Earnings Numbers Decay

Whole Foods Market WFM, reported earnings after the bell today, posting an EPS of $0.38, and Revenues of $3.32 billion.  These numbers came in below both the Zacks Consensus Earnings Estimate of $0.41, and Zacks Consensus Revenues Estimate of $3.346 billion.  

Whole Foods used to be the only game in town if you wanted organic and natural food options, but recently, competition has grown.  Sprouts Fresh Market SFM, IPO'ed in August of 2013, Kroger KR has expanded their organic and natural food options, and Wal-Mart WMT just announced that they would carry Wild Oats organic foods in over 2,000 stores.  Moreover, Wal-Mart stated that they would sell their Wild Oats products at 25% less than other stores offer the same items.  The organic foods segment is now being saturated with increased competition.  

With competition increasing, and Whole Foods trading at 31 times forward earnings, this was a make or break quarter for the company.  And with this miss, on both the top and bottom lines, investors are worried about the future growth of the company.  Furthermore, analysts were expecting Comp Store Sales (stores open for a year or more) to grow at a rate of 5.2%, but the actual numbers came in at 4.5%. 

These earnings numbers sent the stock price tumbling in afterhours trading; Whole Foods is down more than 10% on heavy volume.  Tomorrow morning, Zacks will post a fully detailed earnings report.