Whole Foods Market Third Quarter Earnings

By Investopedia Staff | July 25, 2012 AAA

Whole Foods Market (Nasdaq:WFM) announced its results for the most recent quarter on July 25, 2012. Whole Foods Market owns and operates a chain of natural and organic foods supermarkets. Its products include seafood, grocery, meat and poultry, bakery and prepared foods.

A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: 12 Things You Need To Know About Financial Statements

The Numbers: Whole Foods Market's EPS topped estimates and revenues were in line with expectations. The company reported 63 cents per share versus the 61 cents per share estimate and revenues of $2.73 billion versus the $2.73 billion estimate. EPS rose 26% while revenue climbed 13.6% from the same period last year. Whole Foods Market has averaged revenue growth of 12.7% over the past five quarters. For the third quarter, the company reported net income of $116.8 million, up 32.1% from the year-ago quarter. Last quarter marked the third in a row of rising net income.

Management Quote: "In an economic environment that is proving to be difficult for many retailers, we are thriving and pleased to report another quarter of strong growth and excellent results for our stakeholders," said Walter Robb, co-chief executive officer of Whole Foods Market. "Our accelerated growth plans are on track, and we believe we will continue to gain market share through further differentiating our shopping experience, improving our relative value positioning, and reinforcing our position as America's healthiest grocery store."

A Look Back: Net income has increased 32.4% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 34.6% from the year-earlier quarter.

Looking Ahead: Expectations for the company's next-quarter performance are higher than they were 90 days ago. Over the past three months, the average estimate for the fourth quarter has risen to 57 cents per share from 53 cents. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. The average estimate for the fiscal year is $2.47 per share, a rise from $2.34 90 days ago.

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