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Food and Beverage ETFs Get Indigestion on Whole Food Results


An ETF that focuses on food and beverage stocks was lower Thursday as holding Whole Foods (WFM) slipped 5% in the wake of its quarterly earnings update. The food and beverage sector could see action as we enter the holiday season.

Whole Foods reported net income in line with analyst estimates and raised its dividend.

“But the Street has been used to more dramatic earnings surprises, and the stock is selling off today,” reports Avi Salzman at Barron’s.

Whole Foods reported in-line revenue, and lifted its dividend payout 43%, to 20 cents. Comparable store sales rose 8.5%, although comparable sales for the current quarter are up 7.3% so far, which is a slight deceleration. Sales were hurt by Hurricane Sandy, Barron’s reports.

Cautious consumer spending is one of the major factors that is limiting more growth, reports Zacks.

PowerShares Dynamic Food & Beverage ETF (PBJ) was down 1% on Thursday. The ETF has a roughly 5% position in Whole Foods.

PowerShares Dynamic Food & Beverage ETF

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.