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Fiscal 1Q17 Earnings: Whole Foods Reports EPS, Misses on Revenues

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Series snapshot

Austin, Texas-based Whole Foods Market (WFM) reported its results for fiscal 1Q17[1. quarter ended January 15, 2017] on February 8, 2017. The company reported earnings per share (or EPS) of $0.39, 15% lower than in fiscal 1Q16. Total sales increased 1.9% YoY (year-over-year) to $4.9 billion, falling $60 million short of consensus forecasts.

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Valuation summary

Whole Foods Market (WFM) is currently trading at a one-year earnings multiple of 20.5x, operating in the middle of its 52-week price-to-earnings (or PE) range of 18.4x–23.1x.

The company is trading on par with value-oriented organic food player Sprouts Farmers Market (SFM) and at a premium to supermarket chains Kroger (KR) and Supervalu (SVU). SFM, KR, and SVU are valued at 20.5x, 15.4x, and 9.7x, respectively, on a one-year forward PE basis.

ETF investors seeking to add exposure to Whole Foods can consider the Guggenheim S&P 500 Equal Weight Consumer Staples ETF (RHS), which invests 2.4% of its portfolio in WFM.

About Whole Foods Market

With trailing 12-month sales of $15.7 billion, Whole Foods Market (WFM) is the leading grocer and retailer of natural and organic foods in the US. Although the company was long considered a synonym for healthy foods, its popularity started to wane as mainstream food retailers like Kroger, Costco (COST), and Walmart (WMT) entered the organic space. These food retailers wooed away customers with similar products at competitive prices.

In this series, we’ll explore Whole Foods Market’s 1Q17 performance, valuations, and stock market performance.

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