Boycott? What boycott? Judging by its most recent quarterly results, it looks like Whole Foods Market (NASDAQ:WFMI) is doing just fine, despite last summer's highly publicized furor over CEO John Mackey's views on health care, which led to some vocal protests regarding Whole Foods stores. So much for those threats.

First-quarter net income surged 71%, to $49.7 million, or $0.32 per share. Sales increased 7%, to $2.6 billion. Same-store sales in the quarter increased 3.5%. Let's not forget the comparison was pretty easy, since this time last year Whole Foods reported flat revenue and a 4% comps decrease.

Whole Foods still has a substantial $734.1 million in debt, acquired as part of its Wild Oats acquisition, but has unrestricted cash and short-term investments of $482 million. The grocer also generated a heartening $78.9 million in free cash flow in the quarter, so cash is moving in the right direction.

Investors shouldn't bank on a widespread retail rebound yet, since many consumers are still struggling. However, Whole Foods performed admirably in a difficult environment. Apparently, cutthroat competition from the likes of Wal-Mart (NYSE:WMT), Kroger (NYSE:KR), and Safeway (NYSE:SWY) didn't put a dent in Whole Foods' recovery.

In more good news for Whole Foods shareholders, it raised its fiscal 2010 guidance. It now forecasts earnings of $1.20 to $1.25 per share, up from its previous guidance for earnings of $1.05 to $1.10 per share. It expects sales growth of 8.5% to 10.5% and comps growth of 3.5% to 5.5%. Note that the company doesn't believe it will be able to continue improving gross margins at the rate that it achieved last year, since it is cycling the implementation of its retooled pricing strategy.

In the conference call, Whole Foods management spoke optimistically about its new health awareness initiatives and positive customer response to its value offerings. It's also opening smaller-format stores that cost less while still generating impressive results, a strategy Chipotle Mexican Grill (NYSE:CMG) is also undertaking. Meanwhile, some competitors have pulled back from their organic offerings, a real positive for Whole Foods.

Last quarter, I got a little uneasy about Whole Foods' near-term stock price, wondering if it was getting too expensive given general economic uncertainties. However, Whole Foods first-quarter results display a company that's adjusting very well to an extremely difficult consumer climate, shoring up its position as a great long-term stock idea.

Whole Foods Market is a Motley Fool Stock Advisor pick. Wal-Mart is an Inside Value recommendation. Chipotle is a Rule Breakers selection. Chipotle is also a Motley Fool Hidden Gems selection. The Fool owns shares of Chipotle. Try any of our Foolish newsletters today, free for 30 days.

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