Whole Foods Market Inc.'s shares fell Thursday on concerns about the natural and organic grocer's earnings forecast.
THE SPARK: The Austin, Texas-based company reported late Wednesday that its fiscal fourth-quarter profit jumped nearly 50 percent on strong sales at its expanding base of stores, beating market expectations. It also forecast earnings of $2.83 to $2.87 per share for fiscal 2013. That fell short of the $2.91 per share that analysts polled by FactSet were anticipating.
THE BIG PICTURE: Whole Foods' forecast does not include an expected sales hit from Superstorm Sandy. The company said that the storm's impact has hurt its sales during the fourth quarter and it is assessing the damage and expects to take a one-time charge related to the storm during its first quarter.
Evaluating the damage and calculating the charge could take several months.
Investors are used to the company consistently performing well and any sign of weakness proved unsettling.
THE ANALYSIS: Analysts had a mixed review on Whole Foods.
S&P Capital IQ equity analyst Joseph Agnese downgraded his rating on the company's shares to "Hold" from "Buy" and lowered his target price by $4 to $99 given the lack of visibility for 2013.
Meanwhile, J.P. Morgan analyst Ken Goldman said Whole Foods is one of the best-operated, best-positioned grocers in the U.S. and reiterated an "Overweight" rating. He said investors have become accustomed to the company beating estimates and raising forecasts, but it's not unusual for the company to maintain projections in its fourth-quarter releases.
Goldman maintained his confidence that the company's 2013 forecast is conservative and saw any weakness in the stock as a chance to buy shares.
SHARE ACTION: Shares of Whole Foods fell $4.61, nearly 5 percent, to $91.32 by early afternoon. Its shares are up more than 50 percent since November of last year.