Whole Foods stock price falls to 52-week low

Whole Foods Markets publicly traded stock price rests at a 52-week low today (~$24) following its downgrade by UBS from “buy” to “neutral”.


In 2007, Whole Foods’ earnings fell 10% and the expectation is that 2008 will end similarly. John Mackey, Whole Foods’ CEO, has even gone so far to say that he wished that they never acquired Wild Oats. So what’s going on with Whole Foods?

“It’s the economy stupid” may be a contributor, but not a lone culprit for Whole Foods slide. Integration challenges with Wild Oats, slowed comparable store growth which began prior to the acquisition, investor wariness of retail stocks and a roller coaster blog ride courtesy of CEO John Mackey aren’t helping.

Still, it is surprising to NBJ that Wall Street isn’t supporting Whole Foods more as a preferred retailer in a time of economic instability. Whole Foods customer base is notoriously loyal and less likely to be price sensitive, compared to other food retailers. Even so, Kroger’s quarterly report last week surprised many, as Kroger grew sales 5.8% - 3.5% of that coming from food price inflation alone. So two things are clear – consumers are spending more in grocery stores than in restaurants and food prices are high (and depending who you believe, going higher or stabilizing…not retreating). Is Whole Foods a buy?

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