Whole Foods Market, Inc. (NASDAQ:WFM) released its earnings numbers for the three months through March on Tuesday afternoon after the market closed on Wall Street. The company showed earnings per share of $0.38 for the three month period. Revenue in the quarter, which Whole Foods records as its second of fiscal 2014, came in at $3.3 billion. On Tuesday’s stock market shares in the company fell in line with the general market trend, and finished at $47.95.
Analysts following Whole Foods Market, Inc. (NASDAQ:WFM) were looking for the company to show earnings of 41 cents per share by consensus according to a Businessweek survey of 29 analysts following the company. Revenue in the three months was projected to be $3.3 billion. In the same three months of 2013 the grocery retailer sold $3 billion worth of produce and turned into into earnings of 38 cents per share.
Whole Foods shares lose big after close
In after-market trading Whole Foods Market, Inc. (NASDAQ:WFM) stock was the victim of a massive sell-off in the wake of this afternoon’s earnings numbers. The company’s stock lost more than 8% of its value directly after revealing its earnings numbers for the three months that began 2014. The firm’s poor performance is, along with the results of several other consumer facing companies, a real indication of poor economic activity in the first quarter of the year.
The real cause of the loss of value after the market closed appears to have been the company’s guidance for the rest of the fiscal year rather than its actual performance in the first quarter. Management said that it expected to earn $1.52-$1.56 for the full year, well behind the $1.61 expected by Wall Street.
Today’s massive loss in post-market trading compounds the large loss of value that Whole Foods Market, Inc. (NASDAQ:WFM) has seen so far in 2014. The company’s stock lost close to 18% of its value through trading on Tuesday. After this afternoon’s losses are factored in, the companies shareholders will be resent holding onto the firm’s stock since January 1.
Competition and growth hit Whole Foods
There are tow main reasons for the massive loss in value in Whole Foods Market, Inc. (NASDAQ:WFM) stock this afternoon. The first is that the company’s competition, which includes a wide range of large retailers, are catching up and offering the products that the company’s core market is looking for at a lower price. The second is that the company is still priced for huge growth.
Wall Street is currently pricing shares at Whole Foods Market, Inc. (NASDAQ:WFM) at more than 30 times 2013 earnings. That means there are huge expectations of growth from the company. Given the climate on today’s market, and the miss on headline EPS, it’s no surprise that shares in Whole Foods Market, Inc. (NASDAQ:WFM) took a tumble.
Going ahead management at Whole Foods Market, Inc. (NASDAQ:WFM) will have to convince investors that it can beat out competition while maintaining margins and growing sales. That’s not an easy job, and it will require more convincing earnings reports than this afternoon’s. The company will host a conference call at 5 PM EDT in order to discuss today’s release.