Whole Foods fell 10% to $US58 in after-hours trading.
This came after the company reported Q4 earnings of $US0.32 per share, on revenue of $US2.98 billion.
Analysts polled by Bloomberg were looking for earnings of $US0.31 per share on revenue of $US3.04 billion.
“We reported record fourth quarter operating results which contributed to the best fiscal year performance in our Company’s 35-year history,” John Mackey, co-CEO of Whole Foods said in a press release.
But the stock is tumbling after the company lowered guidance and missed on revenue.
The retailer sees FY14 sales up 11-13%, down from 12-14%.
It also sees FY14 comparable store sales of 5.5-7%, below expectations for 6.5-8%.
While the earnings report looked “healthy” on the surface level, Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, told Business Insider he saw some “unhealthy” signs when he took a closer look.
- “Same-store sales growth in the fourth quarter moderated compared to the prior quarters.”
- “Gross margin was only driven by lower costs, suggesting Whole Foods is being a bit more competitive on price nowadays to drive traffic (and hints, ever so slightly, traditional supermarkets are doing a better job at merchandising organic food offerings). ”
- “The company dropped its FY14 same-store sales outlook, while maintaining its operating profit guidance. Basically, the market’s afterhours reaction is its way of saying lower sales guidance, plus a robust new store opening plan and maybe modest weakening in gross margin, are factors that deserve more of a consideration in the stock.”
Whole Foods is up over 40% year-to-date.