Whole Foods Reports Earnings Above Expectations
Whole Foods Market reported quarterly earnings above Wall Street projections on strong same-store sales.
The company reported third-quarter earnings of 35 cents a share on revenue of $1.51 billion. Analysts surveyed by Thomson Financial expected earnings of 33 cents a share on revenue of $1.54 billion.
Shares jumped 8% in after-hours trading.
"We believe that our third quarter results ... is an indication that our comparable store sales growth has stabilized," said Chief Executive John Mackey, in a prepared statement. "We believe we are on track to meet our goal of $12 billion in sales in 2010."
"We are hopeful that the court will rule in our favor and that we will be allowed to move forward; however, we believe that merger or no merger, Whole Foods Market has a very bright future," said Mackey.
Earlier today, an economist told a federal judge that competition between Whole Foods Market and Wild Oats Markets had led to lower profit margins,
University of Chicago economist Kevin Murphy was the first government witness at a two-day hearing where the FTC is seeking to persuade U.S. District Judge Paul Friedman to block the merger.
The FTC argues that the merger would reduce competition and raise prices for consumers, but the companies argue that they already face fierce competition from traditional supermarket chains.
A central question in the case will be whether the acquisition of Wild Oats would give Whole Foods the power to raise prices, a key test under antitrust law. Whole Foods and Wild Oats lead the organic niche market, but their total sales pale in comparison to larger retailers.