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Whole Foods shares are getting wrecked
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Whole Foods shares plunged 12% on Thursday morning after third-quarter results that missed expectations on earnings and lowered guidance for future sales growth.
On Wednesday evening, the company posted record sales of $3.6 billion, in line with the consensus forecast, according to Bloomberg. But diluted earnings per share of $0.43 missed the forecast for $0.44.
Comparable store sales — at locations open for at least one year — grew 1.3% on a constant-currency basis.
The company expects comparable store sales to be in the "low single digits" for the fiscal year. Guidance for sales growth was a bit light at 7% (previously 9%), with diluted EPS estimated to be between $0.34 and $0.35.
Whole Foods is launching a new line of stores called 365 by Whole Foods that will be nearly as cheap as Trader Joe's. It's expected to help the supermarket chain that specializes in organic food compete better, according to a Bloomberg Intelligence study.
In the earnings statement, Jeff Turnas, president of 365 by Whole Foods, said: "We are really excited about the progress we have made with securing real estate in markets where there is high demand for both quality food and value in a convenient format. We plan to open up to five 365 by Whole Foods Market stores in the second half of next year with the expectation of doubling the number of openings in 2017."
Early in July, Whole Foods admitted that several stores overpriced foods, particularly sandwiches and juices, following a New York City investigation.
The stock is down 28% year-to-date and down 6% over the past year.
Here's a five-day look at the stock.
(Google Finance)
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