All About Comps: What To Expect From Whole Foods Market's Earnings

Whole Foods Market, Inc. WFM is scheduled to report its second quarter financial results after the market closes on Wednesday.

According to Estimize, experts and the crowd are both expecting to witness a slight decline in earnings in relation to last quarter, but a growth of more than 10 percent in relation to the second quarter of 2014.

In the second quarter of 2014, the company reported earnings of $0.38 per share on revenue of $3.322 billion; in the latest quarter, they retrieved $0.46 per share on revenue of $4.671 billion.

For the second quarter of 2015, the Street models consensus earnings of $0.42 per share on revenue of $3.711 billion, while the crowd anticipates consensus earnings of $0.43 per share on revenue of $3.725 billion.

There is no clear trend to cling to.

A second chart illustrates how consensus estimates have evolved over time. Despite a few spikes, both the crowd’s and the Street’s expectations have remained in the same level over the past few months.

All About Comps

In a report published Monday, analysts at Oppenheimer previewed Whole Foods Market’s second quarter results. The experts note that “a lack of comp upside likely limits the potential for a meaningful positive catalyst."

According to a recent article, the firm is forecasting “a comp increase of around 5 percent (4.5 percent ex. Easter), which assumes a ‘modest’ deceleration. In addition, weaker economic data coupled with ‘less positive’ commentary from peer United Natural Foods, Inc. suggests ‘uneven trends.’ As such, the analyst is now suggesting investors add to positions post-quarter instead of playing this data point.”

The note continued to say that “easing comp and gross margin comparisons over the coming quarters ‘brightens’ the sentiments. However, the company's future remains ‘bumpy’ as the analyst doesn't expect comp improvement every quarter.”

Finally, in mid-March, Kroger applied price discounts in its natural and organic offering, “presenting a near-term risk for not only Whole Foods, but the entire industry.” Oppenheimer is “working under the assumption that Whole Foods can manage over time, but more widespread and deeper cuts from other grocers” would alter the firm’s views.