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Whole Foods Profit Rises, But Sales Miss Estimates

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Whole Foods Market Inc. (WFM) Wednesday reported a 21 percent increase in third-quarter profit, aided by demand for its natural and organic food items, while costs were restrained. Whole Foods' quarterly earnings topped Wall Street estimates, while sales came in short of expectations.

The company provided some soft guidance for the fourth quarter, with less brisker same-store sales growth, and increased relocation and pre-opening expenses. It lifted its outlook for the full year 2013.

Whole Foods said it plans vigorous store-opening as health-conscious consumers' penchant for organic food products gain pace, even as rivalry is expected to intensify from those like Kroger Co. (KR).

Whole Foods, based in Austin, Texas, posted quarterly net income of $142 million or $0.38 per share, compared with $117 million or $0.31 per share last year.

On average, 26 analysts polled by Thomson Reuters expected earnings of $0.37 per share for the quarter. Analysts' estimates typically exclude one-time items.

Sales for the third quarter grew 12 percent to $3.06 billion from $2.73 billion a year ago. Twenty-three analysts had a consensus revenue estimate of 3.09 billion for the quarter.

On a same-store basis, sales increased 7.5 percent during the quarter. In the current fourth quarter, same-store sales grew 5.8 percent, the company said.

Gross margin for the quarter increased 61 basis points to 36.6 percent.

For the fourth quarter, the company expect earnings of $0.30 to $0.31 per share on sales growth of 3 percent to 4 percent. Analysts currently expect earnings of $0.31 per share on sales growth of 5.20 percent.

For fiscal year 2013, the company now expect earnings of $1.45 to $1.46 per share, up from the prior range of $1.43 to $1.45 per share. Sales are forecast to grow 11 percent, from the prior range of 10 percent to 11 percent.

Analysts currently expect earnings of $1.45 per share on sales growth of 11.40 percent.

For fiscal year 2014, the company expects earnings of $1.69 to $1.72 per share on sales growth of 12 percent to 14 percent. Analysts currently expect earnings of $1.72 per share on sales growth of 14.20 percent.

The company, which now has 355 stores open, says there is possibility to open up to 1,000 stores in the United States alone.

The company's stock closed Wednesday at $55.58, down $0.04 or 0.07%, on a volume of 4.8 million shares on the Nasdaq. In after hours, the stock fell $1.28 or 2.30%.

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