WFM Stock Plummets 8% After Hours Thanks to Rotten Sales

Slowing sales sent investors straight for the exits

   

WFM Stock Plummets 8% After Hours Thanks to Rotten Sales

Whole Foods Market (WFM) reported earnings after the bell today, and slowing sales sent WFM stock plummeting on heavy volume after hours.

Whole foods store 630 flickr 300x221 WFM Stock Plummets 8% After Hours Thanks to Rotten SalesWhole Foods earnings beat expectations by a penny for Q4 and the full year. But WFM stock investors got skittish when the company missed an already-low revenue bar for both periods.

WFM posted sales of $3 billion in its Whole Foods earnings report vs. expectations of $3.04 billion. That represents just 2% year-over-year growth.

Wall Street’s expectations for 4% growth were anemic enough, though the grocer did have accounting quirks to blame. In fiscal 2012, Whole Foods earnings enjoyed a 53-week calendar year that’s back to normal for the current fiscal year.

The Whole Foods earnings report also revealed $12.9 billion on the top line for the full fiscal year vs. Wall Street’s hopes of $12.98 billion. That’s growth of just 10% — the company’s lowest annual rate since 2009 and a far cry from the nearly 16% growth WFM posted last year.

Slowing same-store sales played a role in the WFM revenue miss. Annual comps growth for WFM was north of 8% for the past two years, but was expected to drop to 7.2% or so. Instead, same-store sales growth slid just below 7%.

Apparently, just after hearing those numbers, WFM stock investors got wise to the high premium on their shares. WFM stock had built up a trailing P/E north of 40 thanks to a 40% run from Jan. 1 to just before Whole Foods earnings were released.

Thanks to the ugly Whole Foods earnings report, WFM stock is now testing its 50-day moving average around $59. While that level could support the stock, a break lower could mean even worse fortunes for shares.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/11/wfm-whole-foods-earnings/.

©2014 InvestorPlace Media, LLC

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