Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Foolish Forecast: Sowing Wild Oats

Not all health foods stores are created equal.

For a study in contrasts, look at Motley Fool Stock Advisor pick Whole Foods (Nasdaq: WFMI  ) , which isn't just bigger than its tiny rival Wild Oats (Nasdaq: OATS  ) -- it's a qualitatively better business as well. Better profit margins (positive as opposed to negative). Better returns on equity (likewise). Better dividends (existent as opposed to non). In short, better all around.

But while Wild Oats has a long way to go to catch up to its larger rival, Wild Oats is at least making an effort these days. That's a fact that I expect we'll see demonstrated once again when the company reports earnings Friday morning. One year ago tomorrow, Wild Oats reported another in a string of loss-making quarters, losing its owners $0.21 per share, diluted. In fact, from April 2004 through March 2005, Wild Oats didn't earn its owners a penny of profit, losing them a combined $1.72 instead. That began to change last quarter, when the company reported its first profitable numbers since Q1 2004 -- three shiny pennies.

The most optimistic analysts following the company hope that it can repeat the second quarter's $0.03 in profit in Q3; overall, however, the Wall Street consensus is that Wild Oats will report just $0.02. Still, that's better than a kick in the head, as the saying goes, and would be much better than last year's Q3 loss.

The company itself did not provide guidance in last quarter's earnings release, but from the comments that CEO Perry Odak made in that release, management does appear to be optimistic about the rest of this year. Noting back then that the company was already in its third quarter (thus implying some visibility regarding the quarter as a whole), Odak expressed pleasure with his company's "strengthening sales momentum" and "gross margin improvement" and predicted "solid" same-store sales throughout the remainder of the year.

All of that bodes well for tomorrow's news and suggests that investors who bid the shares up 3% yesterday just might be on to something.

Shopping for more Foolish commentary on Wild Oats? Try the new and improved:

Are you looking for great companies at great prices? Let Motley Fool co-founders David and Tom Gardner help you find the next big winner with afree trialsubscription to Motley Fool Stock Advisor.

The Motley Fool has kicked off its ninth annual Foolanthropy campaign! Nominate your favorite charities on ourFoolanthropy discussion boardthrough Nov. 6. For guidelines on what makes a charity Foolish,

Fool contributorRich Smithdoes not own shares of either company named above.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 497944, ~/Articles/ArticleHandler.aspx, 10/23/2016 8:17:57 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
WFM $28.08 Down -0.21 -0.74%
Whole Foods Market CAPS Rating: ****