Analyst Meredith Adler says the natural-foods supermarket chain seems very much back on track, combining strong same-store sales growth with improving productivity of new stores, working capital, and stable returns on assets. Adler thinks the outlook is very strong, and she's pleased that Whole Foods is able to generate sufficient free cash to institute a small dividend.
She notes fourth-quarter earnings per share are in line with her estimate, but a penny below the Street, primarily due to temporary external factors. She raised the $1.90 fiscal 2004 (Sep.) earnings per share estimate to $1.94, and set a $2.30 fiscal 2005 earnings per share estimate. Adler raised her $51 target to $63, and is keeping the equal-weight rating.