Whole Foods' profit climbs but growth slows

NEW YORK (AP) -- Whole Foods Market Inc. says its profit rose by 21 percent in the latest quarter, as the organic grocery store chain saw sales climb and costs ease.

The company, based in Austin, Texas, says sales at stores open at least year — a key metric because it strips the impact from newly opened or closed locations — rose 7.5 percent. But in the current quarter so far, the company said the figure was up a slower 5.8 percent.

Shares fell 3 percent in after-market trading to $53.70.

Whole Foods is among the players changing the way people shop for groceries. In addition to traditional supermarket chains such as Kroger and Safeway, people are increasingly getting their food at big-box retailers such as Target, drugstores, specialty stores and even dollar stores that have expanded their grocery sections.

Whole Foods, which has more than 350 locations, is popular because its health glow fits with people's growing desire to eat better. But stores such as Kroger are tapping into that trend as well and rolling out more products or sections labeled as natural or organic.

For the period ended July 7, Whole Foods said it earned $142 million, or 38 cents per share. That's a penny more than analysts expected, according to FactSet. A year ago, it earned $117 million, or 31 cents per share.

Revenue rose 12 percent to $3.06 billion, but was short of the $3.09 billion Wall Street expected.

Looking ahead, Whole Foods raised its earnings per share guidance for the year slightly to $1.45 to $1.46, up from $1.43 to $1.45.

Over the long-term, the company says it sees potential for up to 1,000 stores in the United States as demand for natural and organic products continues to rise.