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Whole Foods, (NASDAQ:WFM), the premier organic and specialty grocer, reports fiscal 4th quarter results after the bell on Wednesday, November 7th. Analyst consensus is looking for $0.60 in earnings per share, on $2.9 billion in revenues for expected year-over-year growth of 43% and 23% respectively.

WFM guided to 7.8% - 8.8% quarterly comp's for q4 '12 with the 3rd quarter report.

Consensus earnings per share and revenue estimates for q4 '12 have remained stable since the late July - early August q3 '12 report.

If the 4th quarter estimates are met, WFM will have grown revenues 16% and earnings per share 32% for fiscal year 2012.

Current full-year fiscal '13 consensus of $2.90 in earnings per share on $13.2 billion in revenues, is projecting year-over-year (y/y) growth next year of 13% and 15% respectively.

Comp's and traffic have been the story at Whole Foods. Here is a table of Whole Food's same-store sales comparisons since January, 2011, with traffic and avg basket size, as well as y/y operating income growth

QuarterTtl comptrafficav bsktop inc y/y gro
Jul '12 q38.2%7.0%1.0%34%
Apr '12 q29.5%7.0%2.5%33%
Jan '12 q18.7%6.0%2.0%29%
Oct '11 q48.7%4.7%4.0%17%
Jul '11 q38.4%5.0%3.0%22%
Apr '11 q27.8%6.0%2.0%19%
Jan '11 q19.1%7.0%2.0%44%
Oct '10 q48.7%7.0%2.0%46%
Jul '10 q38.4%7.4%1.0%46%
Apr '10 q28.7%5.8%2.9%71%
Jan '10 q13.5%3.6%-0.4%53%

* Source - internal spreadsheet

As the reader can quickly see, WFM was well-positioned for the consumer spending rebound off the '08 - 09 recession, and has capitalized on the strong brand loyalty of the store, by driving higher traffic counts on what seems to be fairly constrained or constant spending patterns.

After the '08 - '09 recession, WFM switched to smaller, more productive stores, with lower square footage, which has boosted store productivity and resulted in the kind of operating leverage which generates that kind of y/y operating income growth.

The stock is up about 37% year-to-date (excluding the dividend) so the Street and investors have been well-rewarded with this quality growth stock.

We still have a position, but the size is greatly reduced given WFM's valuation and the fact that despite a couple of pretty decent quarters the last 6 months, with higher earnings revisions, the stock hasn't appreciated much and looks to be consolidating the years gains.

Management is doing so many things right around margins, expense control, private label and returns on invested capital (ROIC). According to our spreadsheet (and we should have added a column to the above table), ROIC for WFM has grown from 9.5% as of Q1 '10 to about 18% as of the July quarter, '12.

WFM management is a very good operator, and the numbers reflect it.

The key issue with WFM is valuation: at 32(x) expected 2013's earnings consensus of $2.90, WFM has a lofty multiple for expected mid-teens earnings and revenue growth for the next three years, thus there is little margin for error.

Our internal spreadsheet values WFM around $130 - $140 per share, while Morningstar has an intrinsic value of $70, splitting the difference, we think WFM is pretty valued, particularly at 19(x) cash-flow.

We'd reload WFM on a pullback to the late '05 - early '06 highs near $79 - $80.

Source: Whole Foods Earnings Preview: Waiting On A Pullback Before We Reload