Is Growth at Whole Foods Market, Inc. (WFM) Worth the Price?

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Whole Foods Market, Inc.On Tuesday, Whole Foods Market, Inc. (NASDAQ:WFM) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Whole Foods Market, Inc. (NASDAQ:WFM) is famous for pioneering the revolution toward healthier food offerings at grocery stores, with a variety of natural and organic products that have produced much higher margins than more traditional grocery chains. Yet investors have set high expectations by bidding up shares of the food giant. Let’s take an early look at what’s been happening with Whole Foods Market, Inc. (NASDAQ:WFM) over the past quarter and what we’re likely to see in its quarterly report.

Stats on Whole Foods Market

Analyst EPS Estimate $0.73
Change From Year-Ago EPS 14.1%
Revenue Estimate $3.03 billion
Change From Year-Ago Revenue 13.4%
Earnings Beats in Past 4 Quarters 3

Source: Yahoo! Finance.

Will earnings at Whole Foods keep up this quarter?
Analysts have marked down their earnings estimates for Whole Foods Market, Inc. (NASDAQ:WFM) just minimally in recent months, cutting a penny per share from the just-ended quarter and $0.02 from their full-year fiscal 2013 earnings-per-share consensus. The stock has suffered somewhat as well, declining about 4% since late January.

Whole Foods continues to demonstrate an impressive awareness of what its customers want and a skillful ability to respond to varying customer needs, even at the local store level. One way it has done so is by keeping employee counts high, bucking the trend at Safeway Inc. (NYSE:SWY) and Wal-Mart Stores, Inc. (NYSE:WMT), which have cut the ratio of employees to store square-footage by double-digit percentages in the past five years. Costco Wholesale Corporation (NASDAQ:COST) has used the same strategy to boost overall sales, seeing employees as a key to boosting customer satisfaction that leads to greater revenue, rather than as a cost center. Whole Foods Market, Inc. (NASDAQ:WFM) is following the same game plan to perfection.

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