Whole Foods (WFMI) may prove today it isn’t just for hippies (WFMI)

Whole Foods Market, Inc. (WFMI) reports Q2 earnings today after the market close.  They have not provided any guidance for the quarter and   Thomson Financial is expecting earnings of 36 cents per share on revenue of $1.49   billion. Back in February Whole Foods announced it would buy its smaller rival Wild Oats Markets Inc. for$565 million, or $18.50 in cash per share. So after the market close,it’s game on.

Many of us lump Whole Foods Market, Inc. (WFMI)into that category of PCC, Co-Ops, Natural Foods stores and that imageof hippies flowing the aisles shopping with smiles and hemp re-usablegrocery bags. That’s how the company started, a bunch of dreamers inthe 70’s who wanted to sell fresh and natural foods to other hippies sothey all could just keep Rockin’ in the Free World. They wanted to makeshopping for groceries a positive experience that was meaningful andhappy, a place where you could go and wear your tie-dye and not besnubbed. They created a paradise for vegans and in the process ofcreating good vibes, the made some heavy money, man… and dude, havethey ever made money.
            
CEO John Mackey has created an empire at what started out being a Co-Ophas grown into a major corporation bringing in $5.6Bin revenue last year with $203M in net income. Those of you that haveshopped at a Whole Foods know that it’s not just your neighborhoodhippy hot spot, it’s a state of the art grocery experience every timeyou walk in one of their stores. They truly are the world’s leadingnatural and organic foods supermarket, they’ve even gone so far asaddressing the "Humane Treatment of Live Lobsters". Back in 2005 Mackey said:
"Weare viewing the lobster as a live creature rather than a commodity thatdeserves no concern. Just because we sell lobsters and have customerswho will buy them is not a compelling argument to maintain status quo." I didn’t think you could hug a tree harder but that’s pretty much standard for Whole Foods, Mackey earlierthis year said: "eating animals causes pain and suffering to theanimals", I guess he doesn’t eat too many chicken McNuggets does he?Just for fun, click around on their website,after about 3 minutes you feel like John Denver is about to come out ofyour screen with the muppets and start singing the "RainbowConnection". This is no slam on Whole Foods, I guess I didn’t have asmuch compasion for my McRib sandwich and how they got it to have those artificial rib like grooves in it – damn those were tasty.

Evenif you are a McRib guy like me or a vegan like Mackey, Whole Foods haseverything you ever wanted in a grocery store plus more. So aftertoday’s call, we will find out if investing in Whole Foods is a goodidea for the average carnivore or leaf eater. Over the past year sharesof Whole Foods have dropped 35%.They pay out a 18 Cent dividend every quarter but can they prove toWall Street they are worthy of a higher share price today? This wouldbe perfect timing for WFMI to turn things around, maybe if they startselling the McRib they could bring in added revenue?

Tellyou what, if the call goes bad today, I’ll personally put in a call CEOJohn Mackey and let him know about my "McRib Revenue" idea. I’m surehe’ll be all over it.

          Frank Lara Jr.       

Frank Lara Jr.  can be reached at [email protected]; he does not own securities in   the companies he covers.