Whole Foods Inc. (WFM) didn’t properly play the expectation game on Wall Street, reporting upbeat numbers but the stock is being punished in the after hours for slightly missing on same store sales and total revenue expectations.
Whole Foods earnings, the bottom line, hit $0.43 per share, investors not happy after hours
While earnings were up from 37 cents per share to 43 cents year over year, hitting estimates and up nearly 18 percent year over year, and comparable same store sales were up 3.6 percent, below estimates, and overall revenue at $3.65 billion also slightly missed. Wall Street is a tough master, as shares were trading down near 11 percent in after-hours trading..
Analysts had expected earnings, the key metric, to come in at 43 cents on $3.71 billion in revenue while same store sales were anticipated to climb to 5.3 percent. The profit of 43 cents was on target, but components driving that profit, revenue of $3.65 billion on lower than expected same store sales growth are attributed as reasons for pushing the stock price lower.
“Our results reflect another quarter of record sales and healthy returns on invested capital,” CEO John Mackey said in the statement. Such stock market soothing isn’t buoying investors on a day when the stock market once again took it on the chin, down over 100 points late in the afternoon to recover into the close, down 86 points on the day.
Whole Foods teases product announcement, but John Mackey is not Elon Musk
Mackey also tried to put on his best Elon Musk interpretation and push the stock price higher by teasing regarding a new product launch, setting up a reveal for a retail concept “unlike anything that currently exists in the marketplace.” Spreading the bankable brand wings of the organic grocer into additional growth markets likely has tremendous potential, but it isn’t exciting investors this afternoon. More likely the stock price will be critically judged when the new concept is revealed “sometime before Labor Day.”
