Whole Foods profit soars but misses forecasts

Whole Foods Market Inc., the largest U.S. natural-foods grocer, said fiscal fourth-quarter profit quadrupled on demand for prepared foods. The company lowered its sales forecast, sending its shares down sharply.

Net income rose to $39.8 million, or 28 cents a share, missing analysts’ estimates. Profit was $9.06 million, or 6 cents, a year earlier, Austin, Texas-based Whole Foods said. Sales increased 16% to $1.29 billion, but sales at stores open at least a year rose 8.6%, less than analysts had projected.

The company said same-store sales might rise 6% to 8% in the next year, down from 11% last year. The chain faces competition from retailers such as Wal-Mart Stores Inc., which began selling organic foods in the summer.

The company said store-opening costs would increase 26% to $2.4 million a store this year, hurting profit.

Shares of Whole Foods dropped $9.29 to $50.83 in trading after hours after the earnings report. They had declined $3.04, or 4.8%, to $60.12 at the close of regular trading.

“We have raised the bar so high that we can’t continue to jump over it at the same rate,” Chief Executive John Mackey said.

Whole Foods reduced its forecast for sales growth to a range of 13% to 17% for the year ending September 2007 from an earlier projection of 15% to 20%.