Zacks Industry Outlook Highlights: Whole Foods, Winn-Dixie, Safeway, Pantry and TravelCenters of America

Chicago, IL – August 17, 2009 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the Retail sector, including Whole Foods (WFMI - Snapshot Report), Winn-Dixie (WINN - Snapshot Report), Safeway (SWY - Analyst Report), Pantry (PTRY - Snapshot Report) and TravelCenters of America (TA - Snapshot Report).

We continue to see value among the defensive retail stocks, such as supermarkets and discounters. Whole Foods (WFMI - Snapshot Report) and Winn-Dixie (WINN - Snapshot Report) look good in the supermarket space. Whole Foods, the natural foods chain, appears to have shaken off the doubts weighing on its prospects with its impressive fiscal third quarter results. The company not only beat the Zacks Consensus Estimate, but also raised guidance for the year.

Winn-Dixie, the operator of more than 500 supermarkets in the Southeastern U.S., also recently provided a positive fiscal fourth quarter pre-announcement and fiscal 2010 guidance. The company has a strong balance sheet, with almost no net debt, and remains on-track with its store remodeling effort.

WEAKNESSES

Retailing stocks have experienced huge run up this year, and many are at risk of giving back those gains if a second half recovery does not materialize. The stocks that we believe are the least attractive are those that are well off their lows, but will continue to experience weak sales trends into 2010. Among the supermarkets, we consider Safeway (SWY - Analyst Report) as vulnerable to continued competitive pressures from discounters.

We also remain wary of convenience store operators Pantry (PTRY - Snapshot Report) and TravelCenters of America (TA - Snapshot Report), as evident from both companies’ weak recent results. The weak outlook for gasoline demand and overall tepid mechanize sales is expected to keep earnings under pressure for the convenience stores.

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