Whole Foods, the ultra popular organic grocer amongst Bay Area lefties is apparently not popular enough to avoid being hurt by the struggling economy.
The aptly nicknamed "Whole Paycheck" reported Wednesday that its first-quarter profit dropped, but the earnings beat Wall Street expectations.
The Austin, Texas-based company, which has two stores in the city and several others across the Bay Area, said its profit slipped to $27.8 million, or 20 cents per share, compared with $39.1 million, or 28 cents per share last year. The results included $11 million, or 5 cents per share, in legal costs.
Analysts polled by Thomson Reuters expected the company to earn 15 cents per share for the quarter, excluding such one-time items.
Sales for the quarter reached $2.5 billion, in line with the prior year.
But comparable-store sales, a key indicator of a retailer's health, slipped 4 percent. Excluding the impact of foreign currency, Whole Foods' comparable-store sales fell 3.4 percent.
Whole Foods chief executive officer John Mackey said the company's decision to cut costs and capital spending helped it manage through the tough economy, which has made shoppers more cost-conscious and pulled them away from higher-end grocers such as Whole Foods.
"We are demonstrating we can operationally adjust to lower sales volumes and believe that this flexibility, combined with our improved balance sheet, will enable us to emerge stronger and better-positioned over the long term," Mackey said.
The company lowered its earnings guidance for 2009, however, its second reduction in full-year expectations.
Whole Foods had said it would not offer sales forecasts given the uncertainty in the economy. But it said it now expects to earn 71 to 76 cents per share for the year, adjusted for one-time costs, lower than the previous estimate of 95 cents to $1 per share.