Shares of Whole Foods Market Inc., which operates six Connecticut stores, rose in trading today, a day after disclosing its first-quarter profit results topped analyst expectations.
At 11 a.m., Whole Foods traded at $12.38, up $3.09, or 33.3 percent. Its Connecticut stores are in Glastonbury, Greenwich, Milford, Westport and West Hartford, which has two locations.
The Austin, Texas-based upscale grocer reported a 29 percent drop in fiscal first-quarter profit, mainly due to legal costs. The retailer had been battered by the recession as cost-conscious shoppers moved away from high-end grocers and traded down from pricey organics.
Whole Foods said its profit after paying preferred dividends slipped to $27.8 million, or 20 cents per share, compared with $39.1 million, or 28 cents per share, last year. The latest quarter included $11 million, or 5 cents per share, in legal costs related to its acquisition of grocer Wild Oats which has run into trouble with the Federal Trade Commission.
Sales edged up to $2.47 billion from $2.46 billion a year earlier. However, sales at stores open at least a year, a key indicator of a retailer’s health, slipped 4 percent. Excluding the effects of the stronger dollar, Whole Foods’ same-store sales fell 3.4 percent.
Profit beat analysts’ average estimate of 15 cents per share, according to a Thomson Reuters poll, while sales were slightly shy of Wall Street’s $2.49 billion forecast.
“We believe Whole Foods has taken the right steps to begin to turn its operations around despite a stiff economic headwind,” Jefferies & Co. analyst Scott Mushkin wrote, adding that he raised his price target on the shares to $13 from $11.
Whole Foods had been battered by the recession as cost-conscious shoppers moved away from high-end grocers and traded down from pricey organics.
The company seems more open to closing stores than they had been in the past and more serious about fixing some problems in its U.S. division, Mushkin wrote. He upgraded his rating on Whole Foods to “buy” from “hold.” (AP)
