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Whole Foods plunges 10% after results disappoint

Whole Foods reported quarterly earnings and revenue that missed analysts' expectations on Wednesday. (Tweet This)

The grocery store posted fiscal third-quarter earnings of 43 cents per share on $3.63 billion in revenue. Wall Street expected Whole Foods Market to deliver earnings of 45 cents a share on $3.69 billion in revenue, according to a consensus estimate from Thomson Reuters.

Shares of Whole Foods fell as much as 11 percent in extended-hours trading.

The company reported that comparable store sales increased 1.3 percent in the third quarter. Analysts had expected the grocery store to deliver growth of 2.8 percent, according to Consensus Metrix.

Read MoreWhole Foods execs apologize for overcharging

In the earnings call, Co-CEO Walter Robb said that comps dropped sharply in the 11th week of the quarter after the New York City weights and measures audit received negative publicity. The audit found that the food retailer consistently overcharged for prepackaged food.

"I want to emphasize, these were not systematic, but rather caused by inadvertent human error," he said. "The audit included errors that were favorable to customers, as well. These are weights and measures issues that can be found in any supermarket."

Robb said his company has seen a slight improvement in those trends, "however, comps are still well below our 2.5 percent average for the 19 weeks prior to the negative publicity."

Gross margin, excluding certain costs, declined 66 basis points to 35.6 percent "due primarily to an increase in cost of goods sold as a percentage of sales," the company reported.

Whole Foods said it expects sales growth of about 7 percent for the fiscal fourth quarter with diluted earnings per share of 34 to 35 cents. Analysts polled by FactSet expected earnings per share of 38 cents for the fourth quarter.

A Whole Foods Market in Oklahoma City
Scott Mlyn | CNBC
A Whole Foods Market in Oklahoma City

For fiscal year 2015, the company maintained its guidance of 9 percent sales growth, with comp store sales growth in the low single digits. Square footage is expected to grow by 10 percent based on 38 new stores.

Whole Foods is competing in an increasingly competitive market with mainstream grocers and discount grocers like Wal-Mart expanding their organic offerings.

During its last conference call, Whole Foods announced it would launch a new value-focused store concept geared toward millennials. Slated to roll out next year, the new stores will be called "365 by Whole Foods Market."

—CNBC's Katie Little contributed to this report.