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To: richardred who wrote (691)	2/9/2006 12:28:50 PM
From: richardred	Respond to of 2801

Whole Foods shares drop on profit miss By Jennifer Waters, MarketWatch Last Update: 12:12 PM ET Feb. 9, 2006 CHICAGO (MarketWatch) -- Shares of Whole Foods Markets Inc. plunged more than 5% Thursday after the high-end grocer of natural and organic foods, turned in earnings that fell shy of Wall Street estimates. -3.75, -5.2%) said on Wednesday that first-quarter earnings climbed 26% to $58.3 million, or 40 cents a share, compared with last year's income of $46.2 million, or 34 cents a share. Analyze food retailers' stock performance. Total sales jumped 22% to $1.67 billion while sales at stores open longer than a year -- an important industry measure -- vaulted 13%. It was the ninth straight quarter of double-digit same-store sales results. The per-share results fell a penny short of the average reached by analysts reporting to Thomson First Call. However, sales matched expectations. Analysts seemed unfazed by the earnings miss, but some said they were waiting to see if the company could make a move to break shares out of their current trading range. "We continue to struggle to recommend investment in Whole Foods at current valuation levels," Bear Stearns analyst Robert Summers said in a note to clients. Whole Foods ended the quarter with $458.6 million in cash and cash equivalents -- a 48% increase over last year -- that did not include restricted cash. In November, Whole Foods gave a big chunk of the $345 million in cash on hand back to shareholders through a $4 special dividend and upped its quarterly dividend a nickel to 30 cents a share. Those were paid out in January. The company said it would buy back $200 million in stock while splitting the stock 2-for-1 in December. Whole Foods' stock has risen sharply in the last year -- as much as 74% -- but has declined 9% since January amid concerns about higher costs hurting profit margins. The company has struggled with local regulatory issues in its efforts to open stores on prime real estate in dense, urban and suburban areas. marketwatch.com