Whole Foods (WFM) to Report Q4 Earnings: What to Expect?

Whole Foods Market, Inc. WFM is scheduled to release fourth-quarter fiscal 2015 results on Nov 4. The big question facing investors is, whether this retailer of natural and organic foods will be able to post a positive earnings surprise in the quarter to be reported.

The company’s past performance reveals that it outperformed the Zacks Consensus Estimate in the trailing four quarters by an average of 2.4%. Let’s see how things are shaping up for this announcement.

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that Whole Foods is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Whole Foods has an Earnings ESP of +2.86% as the Most Accurate estimate stands at 36 cents, while the Zacks Consensus Estimate is pegged at 35 cents.

The company carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors Influencing This Quarter

Whole Foods is gaining market share on account of its national marketing and branding campaigns, and product launches. We believe that effective inventory management and improved store-level performance are helping the company generate better sales. However, increasing competition and aggressive pricing may weigh on Whole Foods’ quarterly performance as more and more companies are entering as well as expanding their presence in the Organic & Natural food business.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Ralph Lauren Corp. RL has an Earnings ESP of +0.58% and a Zacks Rank #3 (Hold).

Dean Foods Co. DF has an Earnings ESP of +4.00% and a Zacks Rank #3.

CST Brands, Inc. CST has an Earnings ESP of +3.57% and a Zacks Rank #3.

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