Whole Foods Market (NASDAQ:WFMI) impressed few investors with its most recent quarterly results. Are the upscale grocery chain's best days behind it?

Fourth-quarter net income soared to $36.4 million, or $0.20 per share, from the year-ago $1.5 million, or $0.01 per share. Sales increased 2.3% year over year to $1.8 billion, but comparable-store sales decreased 0.9%.

CEO and founder John Mackey proclaimed that sales have stabilized and officially turned the corner. Corner-turning sounds nice, and the profit looked good, but some investors weren't pleased. Granted, a mere 2.3% increase in sales is nothing like the kind of quarterly revenue growth Whole Foods used to generate -- in the range of 20% as late as last year.

The company's results leave this Fool a full plate of food for thought. Whole Foods has been trying to offer value meals -- a potentially chilling prospect for margins, albeit a necessary one as consumers pinch pennies. Price wars in books and toys this quarter have been well-publicized, but the conflict rages in groceries, too. Whole Foods has to compete numerous rivals also trying to lure customer traffic, including Wal-Mart (NYSE:WMT), Safeway (NYSE:SWY), Kroger (NYSE:KR), and Costco (NASDAQ:COST). And investors should take note when higher-end retailers like Whole Foods must start rolling out discounts; that move signals eroding margins.

While decent, Whole Foods' outlook for 2010 didn't impress Wall Street. The company projected that per-share earnings will jump 23%-29%, while the Street expected a 31% gain. Investor Leonard Green & Partners also announced that it will convert its preferred shares into common shares, resulting in about 21% more shares outstanding.

Whole Foods has long been one of my favorite companies, but I can't deny that the stock looks pricey. It's trading at 23 times forward earnings -- considerable cabbage for a grocer, even a fancy one. Wal-Mart's trading at 13 times forward earnings, while Costco's at 19, suggesting that Whole Foods' shares have a comparatively impressive performance baked in. And while I do believe in Whole Foods' long-term growth prospects, the company will still face an uphill climb in this soured economy.

Should Fools grab shares of Whole Foods right now, or wait for a more palatable price? Do you even think Whole Foods' upscale image is still relevant in the "new normal" economy? Have all those angry people now forgotten about John Mackey's controversial health-care views? Let us know in the comment boxes below.

Whole Foods and Costco are Motley Fool Stock Advisor selections. Costco and Wal-Mart are Inside Value recommendations. The Fool owns shares of Costco. Try any of our Foolish newsletters free for 30 days.

Alyce Lomax owns shares of Whole Foods Market. The Fool has a disclosure policy.