Whole Foods Shares Rise After Earnings Beat, Dividend Hike

Whole Foods Market Inc. shares climbed 4.5% in Wednesday after-hours trading after the organic and natural grocer reported an earnings beat in the fourth quarter. Net income totaled $88 million, or 28 cents per share, up from $56 million, or 16 cents per share, for the same period last year. The FactSet consensus was 24 cents per share. Sales for the quarter totaled $3.50 billion, up from $3.44 billion last year, but below sales of $3.51 billion. Same-store sales decreased 2.6% missing the 2% FactSet consensus. The company announced a dividend increase to 14 cents per share from 13.50 cents per share, paying on Jan. 24, 2017 to shareholders of record as of Jan. 13, 2017. Whole Foods sees fiscal-year 2017 sales growth of 2.5% to 4.5%, a same-store sales decrease of 2% to flat, and EPS of $1.42 or greater, excluding share repurchases. The full-year FactSet EPS consensus is $1.47. The operating margin is expected to decline 60 basis points for the year due to investments to drive traffic and sales, which will offset cost structure savings. Whole Foods shares are down nearly 15% for the year so far while the S&P 500 Index is up 2.6% for the same period.

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