Whole Foods Market (NASDAQ:WFMI) has had more than its share of negative sentiment surrounding it here lately, but its quarterly results sure made somebody happy last night, considering how the stock went wild in after-hours trading.

Beating up the bears
True, Whole Foods' net income slid 9% to $49.1 million, or $0.35 per share, as it bore the costs of its aggressive store opening plan. But the thing that's got everybody all excited is that the company beat analysts' EPS expectations by $0.02, and that's coming at a time when negative sentiment seemed to drive many people to view Whole Foods as half empty rather than half full.

Whole Foods' revenue increased 13% to $1.5 billion, and same-store sales increased 7%, compared to 9% comps this time last year. Gross profit increased to 35.5% of sales, as compared to 35.2%, with a little help from its contract with supplier United Natural Foods (NASDAQ:UNFI) and the ability to lock in prices on some commodities, including perishables.

With all the negativity that has been swirling around Whole Foods ever since the FTC gave what many of us viewed as ridiculous arguments against its planned acquisition of Wild Oats (NASDAQ:OATS), it's probably been difficult for many investors to remember the things that are impressive about this company for the long term.

With Whole Foods' low store count at around 200 stores, it has plenty of room for growth. Compare the number of stores it has to Safeway (NYSE:SWY), Kroger (NYSE:KR), or Wal-Mart (NYSE:WMT), and you get the picture -- even if it can't (or shouldn't) match that kind of ubiquity, it still has more than ample room for growth. Whole Foods has 18 to 20 new stores planned this year, and 94 stores are in its development pipeline. That speaks well for the long term, since Whole Foods has a good track record of running highly profitable stores that increase their return on invested capital over the course of time.

Whole Foods is sticking with its long-term goals, such as its much-discussed goal of $12 billion in sales by 2010, and believes the sales potential is even greater over the longer term -- if the market continues to grow and as the company continues to excel.

Soul food
I found a few things comforting in the conference call. First off, Whole Foods mentioned the launch of its Five-Step Animal Welfare Rating Program, which tells consumers about their meat: namely, how the animals were raised and treated. That's the kind of innovation that segues into what I believe is an important theme at the company, which consists of the ethics behind consumption, particularly food, as well as the transparency it has always strived for in its labeling.

Despite the competitive climate and the obvious need for Whole Foods to make sure it does have some value pricing in its stores, CEO John Mackey made a comment that assured me the company isn't losing sight of what may very well be its best competitive advantage -- its authenticity. He pointed out that Whole Foods stands for quality food and offering an alternative to cheap food (come on, it's everywhere, in testament to decades of industrialization of food production, which some consumers are obviously starting to question, given the current interest in organics). I don't think it's out of line to imagine that a Whole Foods circular full of price-slash deals, similar to the ones that many price-obsessed grocers jam our mailboxes with, would seriously endanger the brand. It seems that Whole Foods gets that.

Anybody who has any familiarity with the concept of food ethics knows that there are some consumers who take much more into account when making their purchasing decisions than simply low price or convenience -- cheap food is usually cheap for a reason. It seems some consumers increasingly recognize that the items they purchase, the businesses they frequent, can be seen as having repercussions on many different levels. Maybe such "conscious consumerism" is a fad, but then again, maybe it's the new way.

Confused, get conquered?
Whole Foods isn't just a profitable company with a solid track record of returning cash to shareholders even with its high-growth plans. It's also a company that has decided to do many things in a different manner than many other corporations, which seems to have enamored it with its customer base. It's also trading at a major discount to the premium it used to command for its growth and good operational management. It's not far off its 52-week low, which, of course, might make sense if Whole Foods' growth potential was hobbled, but it doesn't appear to be. Its P/E ratio is currently at 27, which is near its five-year low and not much more than the industry's 19 -- Whole Foods' five-year high P/E is a whopping 78. Its price-to-sales ratio is currently 0.86, which is far cheaper than the industry's 1.15.

I don't deny that the recent events surrounding Whole Foods and its CEO have been distracting. For some, these developments have been a deal-breaker. As someone who has written about the events extensively, I can vouch for the fact that it's been tempting to get caught up in the hysteria. However, in the grand scheme of things, there are plenty of reasons to believe that Whole Foods is just as strong as it ever was for the long haul, with or without Wild Oats, and the stock's recent drop merely represents a long-term opportunity that some might regret not taking some day.

Boy, it's been "interesting" to be a Whole Foods shareholder these days:

Whole Foods Market is a Motley Fool Stock Advisor recommendation. Wal-Mart is a Motley Fool Inside Value pick.  

Alyce Lomax owns shares of Whole Foods Market. The Fool's disclosure policy is quality.