Whole Foods Dismal Report Masked By Investment (WFMI)

Whole Foods Market Inc. (NASDAQ: WFMI) posted dismal earnings of $0.01 EPS on revenues of $1.79 billion.  Thomson Reuters (First Call) had estimates pegged at $0.13 EPS and $1.81 billion.  While this also marked its fiscal year-end, what was more important was the outlook and an investment it received.

Green Equity Investors is putting $425 million into Whole Foods viapreferred stock which gives it roughly a 17% interest in the company.  This investment is keeping the pressure coming on the company.

The company now sees fiscal-2009 at $0.95 to $1.00 EPS and revenue of$8.3 billion versus estimates for Fiscal September-2008 of $1.02 EPS on$8.48 billion in revenues.  It did not give same store sales guidance,but said this assumes a flat spending environment. 

This report would be very lackluster if this was anything resembling normaltimes. But times are not normal.  Despite shareholders getting jumped overhere with a big investment after a huge drop in the shares and soft earnings, Whole Foods is up by more than$2.00 to $12.35 in after-hours trading.  Its 52-week trading range is $9.91 to $50.00.

Jon C. Ogg
November 5, 2008