U.S. consumers' penny-pinching ways made for a major theme in 2011. Despite skittish consumers, Whole Foods Market
Let's take a look backwards and compare Whole Foods' financial achievements to several grocery rivals.
Revenue Gain (Loss) %
Earnings (Loss) Per Share
Gross Profit Margin %
Total Debt-to-Capital Ratio
Source: S&P Capital IQ; figures for the trailing 12 months.
As you can see, Whole Foods is the hands-down leader in handsome profit margin; it also generated impressive top-line growth. Even better, Whole Foods' increased its same-store sales by an impressive 8.5% in its fiscal year ended September 2011.
With the exception of Ruddick (which owns and operates the Harris Teeter grocery store chain), you can see the other grocery peers named above are too indebted for comfort. Whole Foods has paid down its debt, putting it in an even better position for growth in 2012.
On the other hand, Whole Foods' impressive financial results have resulted in a premium stock price. Whole Foods trades at 27 times forward earnings, far higher than the other grocery stocks named above. Although Whole Foods' PEG ratio of 1.66 may not sound like a screaming buy, don't be too hasty in believing it to be incredibly overvalued, either. Part of Whole Foods' investment thesis is how much growth is to come, and I believe the organic grocer can exceed expectations over the long haul. This is no run-of-the-mill, conventional company, after all.
When it comes to simple retail footprint, Whole Foods predicts that it can open 1,000 stores in the U.S. alone over the long haul, compared with approximately 300 now. The success of Whole Foods' brand positioning in the organic, gourmet, and healthy-eating niches help back up an extremely bullish case scenario for this food retailing pioneer.
As this successful year draws to a close, there's no reason for investors to lose their appetite for Whole Foods. Companies that can excel in times like these show their competitive edge, and Whole Foods' is sharp.
If Whole Foods shares don't tempt your palate, you could always check out this special free report, which reveals two cash kings of retail. In it, Foolish investors will uncover two companies that are growing revenue despite soft consumer spending and overall economic uncertainty. These two companies are at the forefront of fundamental changes in retail. The report is free, but it won't be forever, so click here to access it now.
Alyce Lomax owns shares of Whole Foods Market. The Motley Fool owns shares of SUPERVALU and Whole Foods Market. Motley Fool newsletter services have recommended buying shares of Whole Foods Market and buying calls in SUPERVALU. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
Amazon and Whole Foods Seize a Prime Opportunity
An extended period of tumult in the grocery industry begins this week.
How Amazon Surprised Everyone With Its Official Debut in Brick-and-Mortar Retail
Gradually investing in a store network might make sense, but Amazon prefers to take the $13 billion shortcut.
Whole Foods Market, Inc. to Lower Prices: What You Need to Know
"Your margin is my opportunity," Amazon CEO Jeff Bezos has said. With Amazon's Whole Foods acquisition, he's staying true to this core business tenet.