Source: Whole Foods.

Just three months ago, investors in grocery chain Whole Foods Market (NASDAQ:WFM) had wondered if the magic was gone from the pioneering natural-foods specialist. Despite having revolutionized the grocery industry with its emphasis on healthy food and high-margin sales, Whole Foods had seen its growth slow, making some question whether rising competition in the organic-food industry had finally eroded its competitive moat. Yet Whole Foods restored investor confidence with strong results three months ago, and now, the grocery chain is looking to keep moving forward as it reports its fiscal first-quarter results on Wednesday afternoon. Let's take an early look at how the quarter has gone for Whole Foods and what investors are looking to see in its coming report.

Stats on Whole Foods Market

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$4.67 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Can Whole Foods earnings keep climbing?
In recent months, investors have stuck to their guns on their views about Whole Foods earnings, with the only change being to boost their fiscal 2016 projections by a penny per share. The stock, though, has soared, climbing 33% since early November.

Source: Whole Foods Market.

After struggling throughout much of 2014, Whole Foods investors got exactly what they wanted in November. Whole Foods' fiscal fourth-quarter results included a 9% jump in overall sales, and even a somewhat tepid 3.1% rise in comparable-store sales was enough to reassure investors that the company's growth strategy remains on pace. Moreover, earnings per share grew 9% from the year-earlier quarter, beating expectations for flat net income and demonstrating Whole Foods' ability to deliver solid financial performance.

Helping to drive Whole Foods stock higher is the realization that competition could have a silver lining. Even as companies like Wal-Mart (NYSE:WMT) look to boost their exposure to organic and natural foods, they face the daunting task not only of providing those products, but also of making sure they can match up to the quality that organic- and natural-food shoppers have come to expect. Although some price-conscious shoppers will live with a lower-quality experience, what's likely to happen with many people is that having more organic and natural foods available will only make Whole Foods Market's offerings stand out even more for their high quality and plentiful variety.

Moreover, an improving U.S. economy has the potential to bolster Whole Foods' growth even further. As job creation accelerates and wage growth improves, disposable income among Whole Foods' customer base climbs. Moreover, the falling price of gasoline has put more money in shoppers' pockets as well, and that could leave more cash available for people to spend on higher-quality food.

One area where Whole Foods has a lot of excitement is Canada, where the grocery chain is looking at a dramatic expansion. In light of rising competitive pressures in the U.S., Whole Foods sees Canada as a largely untapped opportunity, and in November, co-CEO Walter Robb used the occasion of the opening of its 10th Canadian store to talk about plans that could quadruple its presence in the U.S.'s northern neighbor and help it reach the $1 billion mark in revenue in the long run.

In the Whole Foods earnings report, investors should keep an eye on immediate results, especially same-store sales. Now that the gloomy mood has lifted from the stock, shareholders will want to see faster growth from Whole Foods, and the company still has to demonstrate that its new marketing campaign will deliver better results. If Whole Foods fails to live up to expectations, then the hard-won gains it has enjoyed over the past few months could easily disappear. If the company does continue its growth trajectory, though, then the stock could keep climbing into 2015.