Whole Foods Market, Inc.’s (NYSE/WFM) stock price plunged 11% on Thursday, July 30th, after the company reported disappointing results.
During the third quarter, total sales increased eight percent to a record $3.6 billion. But diluted earnings per share landed at $0.43 below consensus expectations of $0.44 cents per share. (Source: Whole Foods Market, July 30, 2015.)
The company said on Wednesday, July 29th that sales at established stores rose only 1.3% in the three months ending July 5th—its weakest growth since 2009 during the economic turmoil.
The company also lowered fourth-quarter guidance way below analyst expectations as the company struggles to keep customers amid intense competition from relatively small players within the industry. Sadly, its shares are down 28% so far this year.
“In this rapidly-changing marketplace, we believe we are taking the necessary steps to position ourselves for the longer term,” said Walter Robb, co-chief executive officer of Whole Foods Market. “We remain focused on innovating and evolving to best serve our customers’ diverse purchasing preferences.”
The Austin, Texas, chain has been trying to lower its prices to maintain its market share in a tough industry. The company plans to launch a new line of stores called 365 by Whole Foods to extend their reach to both new and existing customers.
Moving forward, management expects that same-store sales will grow by a low-single-digit percentage this fiscal year compared to a previously mid-single digit. On the other hand, the company faces mounting competition which forced the company to lower its outlook for the rest of the year.