Whole Foods Market, Inc. (WFMI) recently spiked to a new multi-year high after reporting strong Q4 results that included a 13% earnings surprise. With an average earnings surprise of 14% over the last four quarters and bullish growth projection, this Zacks #2 rank stock offers a healthy take on momentum.
Company Description
Whole Foods Market, Inc. owns and operates a chain of organic grocery stores mostly in the United States and various international locations. The company was founded in 1978 and has a market cap of $10.5 billion.
Whole Foods recent string of earnings momentum continued on Feb 4 when the company reported excellent Q4 results that came in well ahead of expectations.
Fourth-Quarter Results
Revenue for the period was up 14% from last year to $3 billion. Earnings also looked good at 51 cents, 13% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 14%.
The good results were driven by strong same-store sales, up 9.1% from last year to its highest level in 4 years.
Moving forward, Whole Foods expects same-store sales growth to remain between 7% and 9% for the year.
On the back of strong earnings momentum and growing consumer confidence, the company reinstated its quarterly dividend of 10 cents.
Financial Profile
Whole Foods will also continue to benefit from its strong financial profile, with cash and equivalents of $249 million and total debt of $408 million, down $326 million from just last year.
Estimates
With the company raising its full-year guidance, the analysts were quick to follow, with the current year climbing 8 cents to $1.81. The next-year estimate is pegged at $2.06, a solid 14% growth projection.
In light of the recent string of gains, WFMI’s forward P/E of 33X is a sharp premium to its peer average of 19X.
12-Month Chart
Read the Nov 17 WFMI article here
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Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
WHOLE FOODS MKT (WFMI): Free Stock Analysis Report
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