Whole Foods down on slow rise in sales

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MORESurfer attacked by shark near Channel Islands calls rescue a ‘Christmas miracle’Revenue rose to $1.29 billion from $1.12 billion a year earlier, but fell short of analysts’ $1.32 billion prediction. Sales at stores open at least a year – a critical measurement in retailing – rose 8.6 percent after three years of double-digit increases, including a 13.4 percent jump in the same period last year. Whole Foods forecast that same-store sales will grow 6 to 8 percent in fiscal 2007, which began in late September. The company blamed the slower growth ahead on competitive pressures, saying it had reached an inevitable period of slowdown after recent robust growth. Noting those heady days of double-digit same-store sales growth, Analyst Mark Husson of HSBC Securities said the “party is over for the foreseeable future, perhaps forever, as competition is reeling Whole Foods in.” Whole Foods has cut some prices to try to shed its haughty image as “Whole Paycheck.” Husson said the company didn’t deserve the nickname, then added that its fresh food items are good but “not that much better than, say, Safeway’s.” Bank of America analyst Scott A. Mushkin cut his rating on the stock from “buy” to “neutral,” telling clients in a note there is “extreme uncertainty” whether planned new stores can perform well enough to support a higher stock price. Morgan Stanley analyst Mark Wiltamuth cut his price target on the stock from $70 to $63, citing the slowdown in same-store sales increases and rising estimates of costs to open new stores. Mackey opened the first Whole Foods in 1980 in Austin and has led its growth to about 188 stores in the United States, Canada and the United Kingdom. Separately on Thursday, the company raised its limit for executive compensation to 19 times the average pay of full-time workers, or about $608,000. But it said Mackey would take a salary of $1 beginning Jan. 1 and give up future stock-option awards. In fiscal 2005, the last year for which figures are available, Mackey got options on 17,000 shares and compensation totaling $942,000.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! DALLAS – Shares of Whole Foods Market Inc. tumbled to a 52-week low Friday, one day after the organic and natural foods retailer warned of slower growth in sales next year. The shares plunged $13.86, or 23.05 percent, to close at $46.26 – 65 cents below the previous 52-week low – on the Nasdaq Stock Market. The stock had dipped as low as $45.56 during trading. Whole Foods has enjoyed a great run, as health-conscious shoppers paid premium prices for its fancy and organic produce. But analysts have warned that slowing consumer spending and tougher competition from mainstream grocery stores could squeeze Whole Foods. After the close of trading Thursday, the Austin-based company reported that it earned $39.8 million, or 28 cents per share in the quarter that ended Sept. 24, up from $9.1 million, or 6 cents per share a year earlier. Excluding a $3 million one-time charge, the company said it would have earned 29 cents per share, matching the forecast of analysts surveyed by Thomson Financial. last_img