Whole Foods stock takes a fall
No. 1 organic grocery chain posts a wider-than-expected profit decline, sending shares down nearly 12%.
NEW YORK (CNNMoney.com) -- Shares of Whole Foods Market Inc. plunged nearly 12 percent Thursday, a day after the largest natural and organic grocery chain posted a wider-than-expected decline in quarterly profit due to store-opening costs.
The company said late Wednesday that profit fell 11.2 percent to $46 million, or 32 cents a share, in its fiscal second quarter, from $51.8 million, or 36 cents a share, a year earlier. Analysts expected the company to earn 36 cents a share, according to Reuters Estimates.
"There's some short-term issues the company has to get through, but I think investors will see some growth [in the stock] by the end of the year, " said Scott Van Winkle, an analyst with Canaccord Adams.
"It does cost to have growth, and I think at the end of the day [investors] will like it," Van Winkle said about the grocery chain's efforts to open new stores.
Austin-based Whole Foods also said members of the Federal Trade Commission voiced concerns over the grocer's plan to buy rival Wild Oats Markets Inc. (down $0.33 to $17.77, Charts) and that regulators have not yet decided whether to challenge the $565 million deal.