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Industry reports expect WFM to grow in long term

Industry reports expect WFM to grow in long term

Despite Whole Foods Market's recent stock price drop, media reports are not counting the retailer out.

“Whole Foods is an important part of my family's retirement plan, accounting for more than 5% of our retirement investments. And yet I won't be sweating Whole Foods' margins too much in the company's earnings release this week,” wrote Brian Stoffel on The Motley Fool website.

Whole Foods will be reporting its third quarter earnings on Wednesday, and Stoffell noted that he is less concerned about low comparable store sales than he is about volume growth. He and other observers are saying to give the natural foods giant more time to figure out how to adjust pricing to be competitive.

“Whole Foods’ response — price cutting — is hurting sales growth now, but the key thing to remember is that getting price cuts right always takes time. It can take a while for consumers to respond and buy more. Plus it’s a rolling experiment. Some price cuts don’t bring a volume lift, so they have to be redeployed,” wrote Market Watch columnist Michael Brush in a recent editorial.

Even if the retailer doesn’t have strong results for its third quarter earnings, industry observers expect Whole Foods to bounce back — eventually. 

A Seeking Alpha piece by Louise Coleman points to the retailer's physical expansion as a positive sign for the company:

The market is potentially overestimating competitors' power to take down this well-established company. Additionally, there could be failure to recognize Whole Foods' current expansion game plan, with an increase of nearly 200 stores totaling 575 by fiscal 2018, utilizing nearly no debt.

Tomorrow SN will report the third quarter earnings results, but the retailer's turn around will likely be seen in the longer term.  

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