The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
You may still need your Whole Paycheck to shop at organic food giant Whole Foods. But you only need a fraction of it to buy the stock.
Whole Foods (WFM) is the worst performer in the S&P 500 this year. Shares are down nearly 35%.You may still need your Whole Paycheck to shop at organic food giant Whole Foods. But you only need a fraction of it to buy the stock.
Why is the stock doing so poorly? Competition from larger retailers is eating into Whole Foods' earnings.
The organic market chain's recent troubles began back in November. That's when the company lowered its sales and profit outlook for fiscal 2014.
Shares of Whole Foods are, like the organic products it sells, pretty expensive. Before the earnings warning, shares were trading at about 37 times 2014 profit forecasts. When a stock is that richly valued, investors expect nothing less than perfection.
But Whole Foods has continued to be the Wall Street equivalent of a rotting pile of produce.
Whole Foods cut its targets again in February ... and once more earlier this month. In November, it said annual profits could be as high as $1.72 a share. It now thinks that earnings could be as low as $1.52 a share.
Related: Whole Foods stock tanks on lousy earnings
Interestingly, Whole Foods seems to be a victim of its own success.
It's not as if customers have abandoned healthy eating. Quinoa, kale and tofu are still hot. It's just that consumers can get their organic fix ... often for much lower prices ... at places like Wal-Mart(WMT), Kroger (KR), Costco (COST) and privately held Trader Joe's.
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