They were wrong about Whole Foods
Thanks to health-conscious millennials, this company is in fine shape.
Younger people hate the food chain. It's like Ronald Reagan with Russian missiles. He was willing to trust them, but he wanted to verify. The millennials, who will be about 30% of this country in a half-dozen years, want their food vetted and verified.
That's exactly what Whole Foods (WFM) does. What it stands for. The millennials believe Whole Foods wouldn't sell something unless it were as good as it can be for them. I say "good as it can be" because, even if it is made or sold at Whole Foods, it can still be fattening. It can still be "bad for you," so to speak. But you need Whole Foods to protect you from a world of mass production the way you needed Upton Sinclair's The Jungle as a way to expose the wretched unsanitary conditions of the meatpacking industry at the turn of the century.
Now Whole Foods just reported a terrific quarter that saw the stock shoot up 10 points before proceeding to advance 3 more points. This is another stock that didn't fill in the gap once it took off because we are in a much more powerful market than most understand or think about. The stock had spent a lot of time in the low-$80s wilderness as growth-stock portfolio managers had become convinced that the ardor for "expensive" public stores that sell organic food had dimmed. In their place, went the thinking, had come initiatives from Target (TGT), Wal-Mart (WMT) and Kroger (KR) on the mass-merchant side, and Trader Joe's from the cult organic side.
I never thought Whole Foods lost a step, and I stuck by that. But, more important, the company heard what was wrong, adjusted, cut expenses, cut shrinkage, improved the supply chain and introduced some lower-priced merchandise that brought the numbers right back up and then some.
Plus, with the lack of cannibalization in what was thought to be the saturated area around Boston, the company hinted that that its total target goal for 1,000 U.S. stores could be low. It has about 350 locations currently.
The company achieved same-store-sales success of the 21 stores in college-filled Massachusetts, almost double the locations it has in New York State -- and that's not to mention the instant hit that is the store in South Bend, Ind., home of Notre Dame. I think that, in light of this, you could argue that every college needs a Whole Foods nearby because of the millennials' desire for healthier eating.
Plus, the company hasn't even rolled out plans for a loyalty or affinity program. I think that, judging by the Starbucks (SBUX)-like mindset of Whole Foods -- Starbucks being the best of the loyalty-program issuers -- this could be an instant boost to sales. Do not underrate the process of hospitality, as restaurateur Danny Meyer has taught us well, as it can be the most powerful force to get lifetime customers, exactly whom Whole Foods is looking for.
Another catalyst out there might be the opening of the Brooklyn, N.Y. location in November. I have been watching the construction of this amazing, giant-sized store, replete with a 25,000 square foot greenhouse up top, and have marveled at how a borough of 2 million people is just now getting a Whole Foods. It is a reminder of just how much runway there really is for this company.
Whole Foods splits 2-for-1 next week. I know it sounds silly right now, but splits are working for companies with loyal users. This stock isn't done going higher. In fact, it is just now breaking out, and it is setting the stage for multiyear expansion -- and, yes, multiyear multiple expansion -- as the path to long-term growth becomes clear once again.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
More from TheStreet.com
Now Regal....That was hilarious, I choked on my coffee.
I thought most of those Yellow things in the City were cabs, didn't realize some were peoples.
Sorry CGT...I only read Bernanke's statements one way, and they were in English..
NO NEED for "interpretation" here..
There has always been "Cronyism" in our Government to the lowest levels...
That's one of our "BIGGEST PROBLEMS." You can't ever get them out of office.
Well I think it's nap time, then off to hunt some fungi for the last time.
Barry S. :Dead economy? what kind of Mexican camels are you smoking.The Dow is up
9,000 points in 4 years.Do you know how many SMART people have become millionaires
in that time?It`s all about using your head.The economic numbers are up every month.
You bears are just gloom and doom.
You notice Barry S couldn`t come up with Bushs` accomplishments.He also couldn`t
respond why Bush wouldn`t co-operate with the armed services committee.My limo
is here.Obama will be fighting the good fight while I`m gone.Talk next week.
Barry, how short your memory is.The Armed services committee asked the Bush
administration numerous times for records and E-Mails and their answer was
"NO".The WH will answer the questions and you`ll find there`s nothing that amounts
to a hill of beans.We`re setting another record on Wall Street and yet the bitter far right
is praying for a big scandal.If the Repubs really cared about this country they would be
working with the WH instead of just saying "NO" to everything.
Well this is a "banner day" in the Markets.....The "banter" here; So,so??
My Son wore Army boots,my Dad, my Father-IL my exDaughter-IL, Brother-ILs and now a GDaughter.
I wore Army boots...Some of us(5) wore Combat boots, including exDau-IL...
She was in Iraq twice, Kuwait and Afghan once each and that shidthole S.Korea too.
What's wrong with Army boots?...Wear them proudly and shined for Inspections.
Nah....I'm only gonna tie Bush to the AP thing...We lost our "Rights to Privacy."..
When he and his cronies (little dick included) trampled the Constitution into the dirt.
Some could also say, that the IRS's "sweeping powers" might also fall into the category??
Strangely your Rants, Are pretty much what Dear Leader is saying also; About the IRS and AP fiasco.
So why are you down on him so much ?...He doesn't like what Bush did either.
He is your friend....And he is Our President...( I bet you might have voted for him)
I planted a Money Tree once...Followed all the directions on the label..
I think those bastards are liars..
Had a Dollar plant once, but we couldn't spend the leaves...Another lie.
Barry, I still hve 2 hours to educate before the limo takes me to the airport.I heard
your wife is so fat that when she puts on a yellow raincoat and walks down the street
that people motion her over for cab rides.Is that true ?
IRS, targeting crooked tax evaders and Shell Game Orgs....hmmm.
Benghazi...4 dead.....Moore, OK. about 2 Dozen so far....hmmm.
Joplin ,Mo. Wasn't it about 160 dead...?
And neither of those two places were shidtholes...hmmmm.
And the AP thing....That was something Bush set-up several years ago....hmmm.
As I said before, No work that is honest labor is beneath me, nor should it be disparaged by somebody who sucks Koch and his brothers for a living.
And to correct your Azzumptions, being richer does not correlate with greater intelligence, merely that one's aspirations were tuned to different goals in life.
Water was merely stating that some forms of socialist inputs into an otherwise capitalistic
framework is what makes the entire system function better. And to watch out for (well, you should have a handle on this..) temptations to make doctrinal forays into more extremist and polarizing dogma.
But...dont you ever tire of being wrong?
Here you go puppet ....enjoy ....
. Andy isn’t your normal Teabagger with a misspelled sign who rambles on and on incoherently about how the President is a Marxist fascist Kenyan Muslim. He’s actually smart, and he also (with honors).
The part of the discussion I caught was about all the “scandals” made up by the GOP over the last year or so. While Mr. Dean didn’t actually come out and say it, what dawned on me was the fact that the GOP didn’t care about Benghazi or anything else. What they do care about is making the President look bad, for political purposes. You see, they lost the last election in an embarrassing fashion. They’ve got the House gerrymandered into what could be a flustercluck until the next census, but they want the Senate.
Why do they want the Senate? Easy — they want to impeach the President, and they believe that if they can keep the false outrage going into November 2014, they might be able to pull it off. Unlike the House, they can’t gerrymander the Senate and there’s a different strategy now in play. They’re pushing all in with every hand like a hyper-aggressive rookie poker player with an unlimited stack of pseudo-scandals drummed up by the scores of rightwing sites on their massive payroll. It’s not about finding something they could legitimately criticize the President on and sticking with it. They’re counting on the absent-mindedness of the American public while coming up with a new made up scandal every few days. They’re basically throwing feces at the wall like caged animals, hoping that this constant blitz will stick somehow. That’s how propaganda works — it’s about telling a lie big enough (and repeating it often enough) that people will believe it. Are we going to let them get away with it, or are they doing nothing but through their multitude of lies? It’s up to us to decide.
Think I read the "R" word again, along with ****..something..Oh please lets just talk about Markets?
Whole Foods or otherwise.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
As geopolitical tensions threaten to spin out of control, investors are wondering how best to position their portfolios for the global turmoil.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.