Monstrously eccentric CEO and health fanatic John Mackey has finally taken Whole Foods (WFMI) down to a level from which it is unlikely to recover. Shares are off 12% after hours to $20 against a 52-week high $$53.65
Earnings for the last quarter dropped to $33.9 million from $49.1 million in the same period a year ago. WFMI will scramble to keep itself together.
Among other things, Whole Foods is is reducing the number of stores expected to open in fiscal year 2009 to approximately 15 and has cut all discretionary capital expenditure budgets not related to new stores by 50%. The firm will also is suspending its quarterly cash dividend. Since WFMI had a yield of 3.7%, the cut means something.
To nail the lid of the coffin down tight, Whole Foods announced it expects sales growth of 6% to 10% for the year — rather than the previously stated 25% to 30% growth. It said comparable-store sales are expected to grow 1% to 5%, down from the previously anticipated 7.5% to 9.5% growth.
Douglas A.McIntyre
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