Whole Foods Market Inc. Beats Q4 Views, Sees Narrower Margin

Whole Foods Market, Inc. WFM beat fourth-quarter expectations but said its 2015 gross margin will narrow because of higher spending. In after-hours trading, the company fell 5 percent, trading recently at $51.96 a share. The Austin, Texas retailer's same-store sales in the fourth quarter grew at 3.1 percent, down from 3.9 percent in the second quarter. Gross margin in the recent period narrowed by 20 basis points from a year earlier to 35.4 percent because of an inventory charge of $5 million and higher cost of goods. The company said higher investments during 2015 will result in a narrower gross margin, excluding inventory charges. It forecast sales growth of more than than 9 percent and earnings growth in line with or slightly higher than sales growth. That suggests 2015 net earnings of $1.71 a share, on revenue of $15.46 billion. Wall Street predicts 2015 earnings of $1.71 a share on revenue of $15.84 billion. Whole Foods also said it will discontinue offering quarterly guidance. Fourth-quarter net income grew to $128 million, or $0.35 cents a share, from year-earlier profit of $121 million, or $0.32 cents a share. Revenue increased to $3.26 billion, from $2.98 billion. Wall Street expected earnings of $0.32 cents a share on revenue of $3.26 billion. Whole Foods boosted its dividend quarterly dividend Wednesday to $0.13 cents a share, from $0.12 cents, payable Jan. 27.