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Cramer: Youthful Trend to Drive Whole Foods

Wednesday, 22 May 2013 | 6:53 PM ET
No Huddle Offense: Whole Foods Headed Higher?
Wednesday, 22 May 2013 | 6:58 PM ET
Mad Money host Jim Cramer shares his final thoughts of the day.

(Having trouble with the video? Click here!)

Whole Foods is the latest stock that has landed on Jim Cramer's radar, with shares shooting higher this month after the company beat on earnings and raised its full-year forecast.

Looking at those numbers, Whole Foods said second-quarter net income grew to $142 million, or 76 cents per share, from $118 million, or 64 cents per share, a year earlier. Analysts had expected the company to report earnings excluding items of 73 cents a share on $3.03 billion in revenue, according to a consensus estimate from Thomson Reuters.

Also Whole Foods said same-store sales, a key gauge of performance for retailers, rose 6.9 percent for the fiscal second quarter that ended April 14. And so far this quarter, those sales are up 9.4 percent.

"Those results are terrific," said Cramer. "Just terrific."

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A long-time Whole Foods bull, Cramer fully expects to hear more terrific things in the quarters to come in part because he believes Whole Foods taps into a theme that resonates with shoppers.

That is, Cramer believes people feel a greater commitment to seek out and eat food that's not only healthy but grown responsibly.

That theme, he says, is particularly widespread among younger shoppers. As a generation that's coming of age in a time of global warming, deforestation and extreme pollution, young people feel an urgent sense of responsibility to the planet. "And millennials believe that Whole Foods wouldn't sell something unless it's grown responsibly," Cramer said.

That's big.

"Millennials will be about 30% of this country in a half-dozen years," he added. In turn that suggests an entire generation may be coming of age that's committed to the mission of Whole Foods – responsible eating.

In fact, Cramer believes the trend is so strong that as Whole Foods opens new supermarkets – it can tap into a vast audience who share that same desire.

"There's a store scheduled to open in Brooklyn in November. A borough of 2 million people is just now getting a Whole Foods. It is a reminder of just how much runway there really is for this company," he said.

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All told, the Mad Money host sees Whole Foods as a well positioned company at the infancy of a trend.

"People want food that's been vetted and verified," Cramer said. Whole Foods does that. Although the stock has jumped from the low $90's earlier this month to over $100 on May 22nd, "I think the stock is breaking out as the company sets the stage for its future, and perhaps for ours too."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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