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Whole Foods Market
Copyright 2012, Institute of Strategy & Valuation, All rights reserved.
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Whole Foods Market Inc. (WFM), a natural and organic foods supermarket chain, gained 7.6% to $90.69 after reporting better-than-expected results for the second quarter. WFM posted net income of $117MM, which was $90MM higher than the same period last year. Earnings per share (EPS) were $0.64 per share, beating consensus estimates of $0.59 per share. The company raised its EPS guidance for FY 2012 to a range between $2.44 and $2.47 per share from $2.28 to $2.32 per share. Revenue is estimated to be $2.7B for the next quarter, equating to an average estimate of $0.60 earnings per share.
WFM is currently trading at 33.7x P/E’, and an EV/IC’ of 3.5x, both of which are on the high end of historical valuations. The market appears to be pricing in 16% ROI’ with a CAGR of 7% over the next five years. ROI’ is estimated to be between 9% and 13%.
Whole Foods Markets, Inc. (WFM) is the largest natural and organic food retailer, with about 300 stores varying in size from 30,000-55,000 square feet. Whole Foods mission is dedicated to promote naturally grown foods, food safety concerns, and the sustainability of the entire ecosystem.