Whole Foods: Organic Opportunity, Customer-Centric Strategies, And A Robust Store Network Are Catalysts
From other sites
at Benzinga.com (Thu, 7:33AM)
at CNBC.com (Wed, 6:19PM)
at CNBC.com (Wed, 5:58PM)
at CNBC.com (Tue, 11:16AM)
at CNBC.com (Mon, 6:00PM)
at Nasdaq.com (Mon, 1:00PM)
at Nasdaq.com (Mon, 11:24AM)
at CNBC.com (Fri, 1:17PM)
at CNBC.com (Dec 8, 2014)
at CNBC.com (Dec 4, 2014)
Whole Foods: Organic Opportunity, Customer-Centric Strategies, And A Robust Store Network Are Catalysts
- Organic food products account for only 4% of total food sales in the U.S., which means that there is a huge addressable market for Whole Foods to tap.
- By differentiating its products and offering better services, Whole Foods will be able to tap a bigger share of the organic food market.
- Whole Foods intends to triple its store base in the future, and it has the required resources to do the same.
Whole Foods Market: Taking The Temperature Of 'America's Healthiest Grocery Store'
- Whole Foods Market is one of the preeminent U.S. retailers for organic and natural groceries with stores in Canada and the U.K.
- In spite of a dip in stock prices in the past year, Whole Foods has shown overall strong 5-year growth in regards to both EPS and to revenue.
- In order to overcome its reputation as an expensive store, Whole Foods has recently launched a strategy to trim prices for consumers.
- It is also investing heavily in new stores and remodeling old ones.
- These new efforts appear to be successful, as store sales have increased 3.1%.
2014 Results Show A Bright Future For Whole Foods Market
- Whole Foods Market achieved record sales for both the fourth quarter and fiscal 2014, along with mid to upper single-digit earnings per share growth.
- With the help of new stores, value initiatives, and innovations like in-store wine bars and home delivery, Whole Foods should continue to grow.
- With an exceptionally-strong balance sheet, a growing demand for company products, double-digit earnings per share growth, and a fairly-valued stock price, long-term investors should fare well with Whole Foods.
- Whole Foods is adopting a mix of strategies in order to improve its position and fight against the likes of Wal-Mart in the organic food market.
- A major part of Whole Foods' strategy is focused on providing a cutting-edge service to customers by providing quick delivery, high-quality products, and ease of use.
- Whole Foods' valuation is another indicator of its expected earnings growth.
Whole Foods Market Remains A Long-Term Buy Despite Recent Pop
- WFM has regained its footing and delivered a solid final FY quarter.
- Management is focused on the long term, investing in growth and broadening appeal to new customers.
- Building out "mega" performing urban/dense suburban stores is key to the growth story.
- WFM must continue to execute and carefully manage "value" offerings to maintain margins.
Update: Rerating Whole Foods - The Stock Is Now Fairly Valued
- Whole Foods earnings surprised on the upside, with revenues growing 9% and comps increasing 3.1%.
- The biggest positive was gross margin stability, with the company managing to retain margins north of 35%.
- The stock appears to be fairly valued at these prices after the post-earnings bump.
- WFM reported revenue that was slightly less than expected, but EPS that was ahead of estimates.
- Management gave positive guidance and noted that comps were trending up in Q1.
- I previously discussed that WFM was undervalued due to temporary factors holding down performance.
Whole Foods Market - Priced Like A High Growth Stock, But Not Growing Like One
- Whole Foods Market shares have declined by more than 30% in the last 12 months, due in large part to disappointing same store sales growth figures.
- Yet, the shares trade at more than 26 times trailing earnings and 24 times forward earnings.
- Analysts only anticipate low double digit earnings growth moving forward.
- It appears that Whole Foods shares are overvalued, likely by approximately 20% and more disappointment can be expected by the company's investors.
Whole Foods Market Is Rallying Following Its Q4 Earnings Release, Should You Be A Buyer?
- Q4 earnings were released after the market closed on November 5.
- Earnings per share beat expectations and revenue was in-line.
- Comparable-store sales increased 3.1%.
- The company's stock has reacted by moving to the upside.
- The whisper number is $0.31, one cent behind the analysts' estimate.
- Whole Foods has a 41% positive surprise history (having topped the whisper in 14 of the 33 earnings reports for which we have data).
- The overall average post earnings price move is 'as expected' (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.
Whole Foods Earnings Preview: A Nervous Long, But Still Long
- Stock has been basing since last earnings report.
- Sentiment has gone negative - now all the analysts are cautious.
- WFM facing easier comp's in fiscal 2015.
- Still the valuation isn't screamingly compelling.
- WFM is a growth stock, just with slower growth.
- Mechanics of acceleration in comp sales (if any) need scrutiny after the earnings release.
- Growth in weekly sales from old stores combined with a reversal in sales produced from new stores should call for an inflection point in the stock.
- Earnings Power Estimate for the company is $35/share, in the range of sell side price estimates.
- Whole Foods Market, Inc. (WFM) is slated to report 4Q 2014 earnings after the bell on Wednesday, November 5th.
- Adjusted Earnings Per Share: The Street estimate is $0.32 with a range of $0.30-$0.34.
- Revenues: Analysts expect an increase of 9.4% y/y to $3.26 bln (range $3.21 bln to $3.37 bln).
Should You Buy Whole Foods Before Its Q4 Earnings Release?
- Q3 results were mixed compared to expectations.
- Q4 earnings will be released on November 5.
- Analysts currently expect flat earnings and significant revenue growth.
- The stock is down more than 30% in 2014.
Whole Foods Markets - Near-Term Uncertainty Creates Opportunity For Long-Term Investors
- A false narrative around competition from Wal-Mart and others has arisen, creating uncertainty.
- The current price offers attractive an entry point for long-term investors.
- WFM has upside driven by innovation, technology and continued category leadership.
- A strong balance sheet funds continued growth without use of debt, and supports a modest dividend.
- Management has a long-term view, balancing needs of customers, shareholders and employees.
Whole Foods Market: Why Investors Should Continue Avoiding This Expensive Stock
- Intense competition will hurt Whole Foods.
- Reducing prices and increasing expenditure is another negative for the company.
- On a fundamental basis, Whole Foods is more expensive than its competitors.
- Whole Foods is a sell.
- As the organic food market expands, Whole Foods faces reduced earnings and threats from new competition. Some critics scoff at its image, claiming it markets only to the well-heeled.
- Whole Foods’ customers are committed to the brand. Skeptical? Check out Whole Foods’ robust fan engagement on social media: 1.15 million+ likes on Facebook. 3.72+ million on Twitter. And more.
- Whole Foods has succeeded in creating a powerful reputation, and a large and loyal customer base. Its effective reputation management, online and off, will see it through this challenging period.
Mon, Dec. 15, 2:08 PM
- It's a volatile day for Whole Foods Market (WFM +0.7%) amid some takeover chatter (Publix today).
- In earlier trading, shares of WFM threatened to hit the $50 mark for the first time since May.
- Back to fundamentals: Despite the focus on the comps reported by Whole Foods, some analysis points to the steady rate of EPS growth the grocery store operator keeps delivering.
Wed, Dec. 10, 10:22 AM
- The S&P 500 Retail ETF (NYSEARCA:XRT) is up 0.3% today despite the negative action in the broader market.
- A forecast for sustained lower oil prices is the major reason for the upswing.
- Top 20 XRT holdings showing gains: Limited Brands (LB +0.6%), Whole Foods Markets (WFM +0.4%), Casey's General Stores (CASY +0.3%), Ross Stores (ROST +0.7%), Kroger (KR +0.9%), Advance Auto Parts (AAP +0.4%), Target (TGT +0.4%), Zumiez (ZUMZ +0.3%), CST Brands (CST +1.3%).
Sat, Dec. 6, 10:24 AM
- Grocery delivery upstart Instacart is raising $100M from new and old investors at a pricing which gives the company a $2B valuation and plenty of cash to fund expansion.
- Sequoia Capital and Andreessen Horowitz have added to their original investments, reports Re/code.
- Instacart, which was started by a former Amazon supply chain engineer, delivers groceries from participating stores to consumers in larger markets within an hour.
- Major retail chains such as Whole Foods Markets (NASDAQ:WFM), Kroger (NYSE:KR), and Costco (NASDAQ:COST) are participating in Instacart's expansion - perhaps playing a little defense against Amazon Fresh (NASDAQ:AMZN) which also has growth plans.
- What to watch: Instacart's simple business model of a personal shopper army and vibrant website contrasts sharply with the distribution/branding might of Amazon Fresh (AMZN), but could end up in the same razor-thin margin predicament ($5.99 for one-hour delivery?). Meanwhile, old-school Kroger (KR) has recorded 44 straight quarters of positive comps and just raised its full-year profit guidance off of solid store execution.
- Related grocery stocks: SVU, SWY, RNDY, SFM, OTCQB:PUSH, TFM, WMT.
Thu, Nov. 6, 10:40 AM
- Organic food sellers rally after a reassuring Q3 report from Whole Foods Market (WFM +10.3%) tips sentiment favorably on the sector.
- There's a thought among retail analysts that lower oil prices are helping to boost traffic.
- Gainers: The Fresh Market (NASDAQ:TFM) +4.8%, Fairway Group (NASDAQ:FWM) +4.8%, Sprouts Farmers Market (NASDAQ:SFM) +1.9%, WhiteWave Foods (NYSE:WWAV) +0.6%.
- Previously: Enthusiasm builds over Whole Foods Markets
Thu, Nov. 6, 9:23 AM
- Whole Foods Market (NASDAQ:WFM) is poised for a rally after Q3 results impressed.
- There's a wave of analysts raising targets and estimates based on the company's outlook, although JPMorgan gets the nod for being ahead of the Street with its call.
- The big takeaway from the WFM earnings report and early look at Q4 is that the strategy by Whole Foods to lower prices amid organic food competition is seeing some benefits with traffic and branding.
- WFM +8.9% premarket
Thu, Nov. 6, 9:14 AM
- Gainers: PLNR +74%. PESI +24%. SWIR +20%. MEET +13%. RVLT +11%. COT +11%. DATA +11%. ACAS +10%. NDLS +9%. KATE +8%. KATE +8%. WFM +9%. HZNP +6%. CECO +6%. DRYS +5%. TRUE +5%.
- Losers: AEZS -51%. SZYM -47%. SNMX -26%. GNW -24%. WWWW -22%. CSOD -19%. PHMD -17%. GERN -14%. MCP -12%. GNRC -11%. WAC -9%. QCOM -7%. Z -7%. PBR -5%.
Wed, Nov. 5, 4:15 PM
- Whole Foods Market (NASDAQ:WFM) reports comparable-store sales rose 3.1% in FQ4 vs. its guidance for a 2.5-3.5% rise.
- The comp mark was 3.9% last quarter and 5.9% a year ago.
- Transactions were 1.3% higher during the period, while the average basket was up 1.8%.
- The EBITDA margin came in at 9.1%.
- Gross margin rate -20 bps to 35.4%.
- Guidance: The company sets a FY15 target of +9% sales growth and EBITDA margin of around 9%. FQ1 comps are trending +4.6% through November 2.
- WFM +6.0% AH.
Wed, Nov. 5, 4:04 PM| 5 Comments
Mon, Oct. 20, 8:36 AM
Mon, Oct. 6, 9:53 AM
- Whole Foods Market (WFM +1.3%) is in the process of trying out price cuts on produce items and sampling more weekly deals, according to Fierce Retail.
- The test run of promotions will run for a few months in select markets before the company decides if it will push it out nationally.
- Whole Foods is looking to offset lower prices with operational efficiencies and a trimming of expenses.
Mon, Oct. 6, 7:57 AM| 25 Comments
Tue, Sep. 30, 12:42 PM
- Shares of Whole Foods Market (WFM +1.8%) are higher on heavy volume on some recycled rumors of a takeover bid by a bigger player.
- Analysts covering the sector are a bit wary, thinking WFM is a tough bolt-on for some of the names mentioned as potential acquirers.
Thu, Sep. 11, 9:29 AM
- Retail analysts are duly impressed by the 4.8% comp delivered by Kroger (NYSE:KR) in Q2.
- Though there's been plenty of talk about Wal-Mart (NYSE:WMT), Target (NYSE:TGT), and even Whole Foods Market (NASDAQ:WFM) grabbing mass market grocery share - Kroger has put up a steady string of turf-defending quarters.
- KR +2.0% premarket.
Mon, Sep. 8, 6:58 AM
- Whole Foods Markets (NASDAQ:WFM) announces it will offer one-hour grocery delivery service in 15 U.S. cities in partnership with Instacart.
- The grocery store operator also plans to offer customers in select markets the ability to place orders via Instacart and pick up their order in the store later.
Tue, Aug. 5, 11:33 AM
- Whole Foods Market (WFM +3%) is having a volatile day after rumors of interest by Carl Icahn in the company crop up.
- Shares of WFM were as high as +5%, and volume on WFM for the day is already 150% of normal trading activity, despite the speculative nature of the original report.
Thu, Jul. 31, 9:11 AM| 4 Comments
WFM vs. ETF Alternatives
Other News & PR