Back to top

Analyst Blog

Whole Foods Market, Inc. (WFM - Analyst Report) is slated to report its second-quarter fiscal 2013 results on May 7, 2013, after the market closes. In the last quarter, it posted a positive surprise of 1.3%. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Effective inventory management and improved store-level performance have helped the company sustain the downturn and achieve improved sales and profit. Whole Foods has been revamping its pricing strategy and concentrating more on value offerings that have boded well for the bottom line.

Earnings Whispers?

Our proven model does not conclusively show that Whole Foods is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 for this to happen. This is not the case here as you will see below.

Zacks ESP: ESP for Whole Foods is 0.00%. This is because the Most Accurate Estimate stands at 73 cents, which is in line with the Zacks Consensus Estimate.

Zacks Rank #4 (Sell): Whole Foods’ Zacks Rank #4 (Sell) lowers the predictive power of ESP because the Zacks Rank #4 when combined with 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks That Warrant a Look

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

  • Campbell Soup Company (CPB - Analyst Report), Earnings ESP of +1.79% and a Zacks Rank #2 (Buy)
  • J&J Snack Foods Corp. (JJSF - Snapshot Report), Earnings ESP of +0.90% and a Zacks Rank #2 (Buy)
  • Dean Foods Company (DF - Analyst Report), Earnings ESP of +3.85% and a Zacks Rank #3 (Hold)

Please login to Zacks.com or register to post a comment.