Digesting Whole Foods

Whole Foods shares slide in premarket after 1st-quarter earnings decline

NEW YORK (AP) -- Shares of Whole Foods Market Inc. dropped in premarket trading Wednesday after the organic and natural foods retailer said its first-quarter profit fell 13 percent, missing Wall Street estimates.
The stock lost $3.24, or 9.6 percent, at $30.40.

Goldman Sachs analyst Simeon Gutman cut his price target on Whole Foods to $39 from $45 in a note to investors, calling its results "indicative of a business in transition."
He also lowered his full-year outlook and reiterated his "Neutral" rating, saying the company's acquisition of Wild Oats Markets Inc. is still in its "early, more expensive stages." The resulting higher costs, coupled with uncertainty over the broader U.S. economy, make Whole Foods shares unattractive at the moment, Gutman said.
On Tuesday, Whole Foods said its first-quarter earnings sank to 29 cents per share, weighed down by costs from last year's acquisition of Wild Oats.
PiperJaffray analyst Mark D. Churchill cut his target price $3 to $33 and lowered his profit estimates in a note.
Earnings will likely continue declining through the rest of the year, Churchill said, due to weaker consumer spending, acquisition costs and the company's aggressive guidance for 25 to 30 new stores in 2009.
On Tuesday, shares of Whole Foods lost 11 cents to close at $33.64.