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Whole Foods Profit Down; Strong Outlook Lifts Stock

Whole Foods Markets posted a lower fourth-quarter profit due to increased expenses; but it also reported revenue that beat expectations and offered a very strong outlook that drove its shares higher.

A Whole Foods Market in Dallas.
Donna Mcwilliam
A Whole Foods Market in Dallas.

Shares of the grocery-store chain climbed 2.06 percent in after-hours trade, having closed regular market hours down 81 cents, or 1.88 percent, at $42.25 on the Nasdaq.

Whole Foods, which sells natural and organic foods, said its profit was $33.9 million, or 24 cents per share, for the fiscal fourth quarter. That was down from $39.8 million, or 28 cents per share, in the year-ago quarter.

A Thomson Financial analyst survey had predicted that the company would report earnings of 30 cents per share, on revenue of $1.6 billion. Revenue for the quarter had grown to $1.74 billion from $1.29 billion.

Whole Foods also gave a strong outlook for fiscal 2008, which cheered investors: It raised its guidance, calling for full-year fiscal 2008 sales growth of 25 percent to 30 percent; it predicted comparable sales growth of 7-1/2 percent to 9-1/2 percent; it said it will open a number of new stores comparable to what it opened in fiscal 2007.

Another key announcement: The company said that it will raise its quarterly dividend to 20 cents per share from 18 cents.

Whole Foods, which bought rival Wild Oats Markets in August, has faced increasing competition from other grocers as those outlets expand their offerings of organic, natural and prepared foods.

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Wire services contributed to this report.