Brian Kelly: Around $67, Whole Foods ‘Worth a Shot’
”I think the valuation is a little full and the report was somewhat disappointing,” says Joe Terranova.
”But they usually beat,” counters an enthusiastic Brian Kelly. “The market had a lot of expectations built in.”
Those were the immediate reactions from two of the Fast Money traders as they considered the the 4% decline in Whole Foods during extended trade, and how to trade the move.
The sell-off was triggered by earnings that met Street expectations but nothing more. Also Whole Foods said a key sales gauge rose less than analysts had expected
”But they also said the $50 and up basket is starting to increase and overall sales increased,” counters Kelly. Total sales rose more than 12 percent to $2.4 billion.
”I think they’re executing. Around $67, I think it’s worth a shot,” Kelly says.
By the numbers the grocery store chain posted net income of $75.5 million, or 42 cents per share, for the fiscal fourth quarter ended Sept. 25.
Analysts, on average, were looking for a profit of 42 cents per share for the latest quarter, according to Thomson Reuters I/B/E/S.
Closely watched same store sales, which excludes relocations, expansion and stores open less than a year increased 8.4 percent -- short of the 9.1 percent gain analysts had expected.
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