Shares of Whole Foods Market Inc. rose in trading Thursday after the natural and organic grocer reported a healthy fiscal first quarter.
THE SPARK: Whole Foods reported after the market closed Wednesday that stronger revenue drove its net income up 33 percent to $118.3 million, or 65 cents per share. That beat the 60 cents per share that analysts anticipated. The Austin, Texas-based company also nudged up its full-year forecast.
THE BIG PICTURE: Whole Foods benefited from lower costs during the period, but also another quarter of strong sales growth. The company has been a standout in recent years as it has increased its appeal to both high-end and average-spending shoppers with a wider array of products and a renewed focus on health.
THE ANALYSIS: J.P. Morgan analyst Ken Goldman kept a neutral rating on the company's stock but called Whole Foods a "first-rate" company in a research note. He said the modest rating reflects that Whole Foods shares already are priced right.
"Whole Foods is arguably the best-operated, best-positioned grocer in the U.S., with unparalleled stores that offer variety, quality and convenience. Since the recession, the company has done an admirable job of lowering prices and rebranding its image," he said in a note. "So we generally are positive on the name for the long term."
SHARE ACTION: Shares rose $3.99, or 5.1 percent, to $81.92 by late afternoon Thursday. They have traded between $53.32 and $78.31 in the past 52 weeks.
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