Ooff! Bummer for Whole Foods shareholders

The grocer is trading down 19% after hours on news of 24 cents in fully-diluted earnings last quarter and projections for full year profits of 93 to 95 cents.  They also halted their dividend and announced that only 15 new stores were in the works for 2009, down from up to 30.

The stock is down from over $70 two and a half years ago, but is still expensive at 20 times earnings with no yield. Why would you buy a high-end grocer at this point in the credit cycle when it doesn’t even pay a dividend? Aren’t dividends what grocery stores are for, anyway?

Disclosure: this post is a bit of a brag, since I bought puts last summer and am holding pat.

One thought on “Ooff! Bummer for Whole Foods shareholders

  1. Sold my puts this morning after WFMI sank a bit more. I’ll look for better prospects for the cash. These things can bounce like hell after a free fall.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Connecting to %s