Whole Foods sees demand for 1,200 stores in the U.S. alone. The company has signed 57 new leases in the past 12 months.
ELISE AMENDOLA • Associated Press,
Whole Foods' shares fall on outlook, 1Q results
- Article by: ANNE D'NNOCENZIO
- Associated Press
- February 12, 2014 - 5:58 PM
NEW YORK – Shares of Whole Foods Market Inc. dropped in after-hours trading Wednesday after the grocery chain reported that its fiscal first-quarter profit and revenue fell below analysts’ forecasts.
The Austin, Texas-based grocery chain, known for its organic and natural food offerings, also lowered its earnings projections for the year for the second time in months. It also pared down its full-year revenue guidance to the lower end of its expected range.
The results show that Whole Foods is facing an increasingly competitive landscape. The chain had been able to boost sales in large part because of its healthy product selection fits with Americans’ changing eating habits. But more mainstream players like Kroger Co. are increasingly tapping into that trend as well, and rolling out more products or sections labels as natural or organic.
During a conference call with investors, executives acknowledged a more competitive landscape but expressed confidence in their business as the chain continues a rapid expansion.
The company sees demand for 1,200 Whole Foods Market stores in the U.S. alone. The company has signed 57 new leases over the past 12 months.
But investors weren’t impressed with the latest results. When company released its earnings on Wednesday after the markets closed, its shares dropped more than 7 percent, or $3.97 per share, to $51.49 in after-hours trading.
The chain earned a profit of $158 million, or 42 cents per share, in the quarter that ended on Jan. 19. That compares with a profit of $146 million, or 39 cents per share, in the year-ago period. Revenue rose 10 percent to $4.24 billion in the quarter.
Analysts expected 44 cents per share on revenue of $4.29 billion, according to FactSet estimates.
Revenue at stores opened at least a year rose 5.4 percent, below the 5.6 percent gain analysts were expecting.
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