Like most groceries that you will find while strolling the aisles of Whole Foods Market (NASDAQ:WFMI), last night's quarterly report was ripe with natural goodness, without any pesky fillers or additives. The company closed out fiscal 2003 in fit fashion, topping the $3 billion mark in sales. Earnings grew by 23% for the year as the grocer saw its comparable-store sales gain 8.6%.

The comps figure is impressive. Unlike Gap (NYSE:GPS), which has been sporting huge gains at the store level after a couple of years of painful declines, Whole Foods was tacking on to last year's heady 10% comp gains. As a pocket change bonus, the company also initiated a small quarterly dividend.

Good company. Great stock. Our own Tom Gardner found unnatural gains in this natural retailer when he singled out the equity in Motley Fool Stock Advisor this past summer. But as the market started to take notice, the stock's capital appreciation began to lap its fundamentals. Tom eventually recommended that subscribers sell the stock for a hefty 40% gain.

It's hard to argue that Whole Foods is cheap on a valuation basis these days. The company is looking to grow earnings by 15% to 20% in the new fiscal year. The only problem is that the stock is already trading at 30 times fiscal 2004's profit guidance, and those numbers are assuming yet another year of healthy same-store sales growth.

The company may have gotten off to a good start when California picketing at some traditional grocers drove traffic to Whole Foods, but it's going to have to earn it the rest of the way.

You also have companies such as Campbell Soup (NYSE:CPB) and Heinz (NYSE:HNZ) rolling out organic variations of their foodstuff staples. While this vindicates the organic trend, it also shoehorns the wares into traditional grocery store outlets. With the organic offerings gaining shelf space everywhere from the Albertson's (NYSE:ABS) round the corner to the Wal-Mart (NYSE:WMT) superstore on the other side of town, will Whole Foods feel the pinch?

Success brings bragging rights but it also attracts competitors. The ravaged supermarket chains are hungry to grow again. Borrowing liberally from the models of Whole Foods and Wild Oats (NASDAQ:OATS) should be a no-brainer for those empty bellies.

Can't believe they'll eat the Whole thing? They might and it may not be pretty.

Have you been to a Whole Foods or Wild Oats lately? What do you think of organic food? Do you spend more time reading product labels at the supermarket than you do the morning paper? All this and more -- in the Organic Living discussion board. Only on