The fiscal second quarter struck again, and Whole Foods Market Inc. (NASDAQ: WFM) had a repeat performance of last year’s disaster. At this point investors and analysts alike are asking if Whole Foods can ever get this quarter right. As a result, analysts are weighing in on what they think the direction of this organic grocer is.

The financial results in question were $0.44 in earnings per share (EPS) on $3.6 billion in revenue, compared with Thomson Reuters consensus estimates of $0.43 in EPS on $3.7 billion in revenue. The same quarter from the previous year had $0.38 in EPS on $3.32 billion in revenue.

The organic grocer was raised to Outperform from Sector Perform at RBC Capital Markets, on the heels of earnings weakness. Merrill Lynch downgraded it to Neutral from Buy with a $48 price objective. Sterne Agee CRT maintained its Buy rating but lowered its target price to $55 from $60 in the call. Janney Capital Markets maintained its Neutral rating and lowered its fair value target to $45 from $52.

Credit Suisse has a Neutral rating but moved its price target down to $40 from $52. The firm explained the change in the price target was due to the belief that the stock will trade off materially, but this weakness is not seen as a buying opportunity.

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Credit Suisse detailed in its report:

Whole Foods provided further evidence of the growing competitive issues in the specialty food landscape, as second quarter comps disappointed and the company surprisingly announced the launch of a value-oriented format to more broadly connect with customers. EPS of $0.44 was roughly in-line with consensus after adjusted for one-time items, but the composition disappointed. Comp growth of 3.1% (excluding the Easter shift) decelerated throughout the quarter and missed consensus by about 150 basis points, as competition, cannibalization, and weather impacted results. A better than expected gross margin and cost control offset the shortfall. More surprising was the vague announcement of a new format focused on providing industry-leading product at value prices, which represents a stark contrast to the core concept. Overall the second quarter update raised concerns in our view, including whether the company is investing fast enough in price, as well as what the new format says about the industry landscape and the opportunity for the core concept. Also, while assessing the new format is impossible given the absence of any detail, success is certainly not guaranteed (it’s unclear how much testing has been done) and there are certainly questions around how management balances two concepts with different price points.

Credit Suisse also lowered its fiscal 2015 EPS estimate to $1.72 from $1.76 and the fiscal 2016 estimate to $1.88 from $2.00. Finally, the firm lowered its fiscal 2017 estimate to $2.12 from $2.28.

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Merrill Lynch’s Robert Ohmes and Marisa Sullivan were on the call for Whole Foods. They explained the downgrade as an uncertain outlook on same-store sales, as well as concerns over the potential impacts of Whole Food’s newly announced lower-priced store concept.

The firm further explained the downgrade in its report:

Whole Foods reported fiscal second quarter adj. EPS of $0.43 (vs. our estimate of $0.42 and in-line with consensus). However, same-stores sales decelerated to +3.6% (vs. our 4.5% estimate), driven by a slowing traffic comp (transaction growth was +0.8%, down 150 basis points from fiscal first quarter) and greater-than-expected cannibalization in Chicago and Florida that offset a 50 basis points tailwind from the Easter shift and +2.8% growth in basket size. We do not have a strong view that same-store sales will improve following an initial slowdown given that comp-driving initiatives (store refreshes, produce price investments, Instacart, ad campaign, & affinity program) did not support a comp acceleration in the fiscal second quarter of 2015 and appear unlikely to drive same-store sales in the near term. Given a more muted comp-outlook and expectations for continued gross margin pressure from Whole Food’s value efforts, we are adjusting our 2015 EPS to $1.73 from $1.75.

At the same time, the new store concept implies uncertainty for the core business. The new concept will offer a lower-priced assortment in a streamlined small-store format and is expected to launch next year. Merrill Lynch views the new format as an effort to appeal to the middle-income customer demographic that is driving much of growth in natural and organic. However, the move generates uncertainty over the growth outlook for Whole Food’s core business, including the potential for increased cannibalization and margin pressures. The brokerage firm is also concerned that the new concept could be a distraction to the comp-turnaround efforts at the core brand.

24/7 Wall St. has included a couple of other analyst calls:

• Deutsche Bank has a Hold rating and lowered its price target to $40 from $54
• Oppenheimer has an Outperform rating and lowered its price target to $50 from $57

Thursday afternoon, shares of Whole Foods were down 10%, at $42.95 in a 52-week trading range of $36.08 to $57.57. The stock has a consensus analyst price target of $55.80.

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