Whole Foods (WFM) Margin Softness Planned, DB Reiterates Buy

Deutsche Bank today maintained a Buy rating on Whole Foods Market (NASDAQ: WFM) with a price target of $100.00. Analysts stressed that recent outlook for lower gross profit margin was not a reaction to macro or competitive concerns, but was consistent with management's plans to improve its relative price/value position.

"WFM is regularly checking prices on 100's of SKUs across a number of competitors; improved data/analytical capabilities should help WFM narrow or eliminate the pricing gap with competitors," said analyst Shane Higgins. He recently sat down with Whole Foods co-CEO Walter Robb, and is upbeat about the company's initiatives.

"While GPM should be down slightly this year, WFM still expects operating margins to expand +20-30 bps (6.6%-6.7% range for FY13), helped by expense leverage and continued focus on controlling costs," concluded the analyst.

For an analyst ratings summary and ratings history on Whole Foods Market (NASDAQ: WFM) click here. For more ratings news on Whole Foods Market click here.

Shares of Whole Foods Market closed at $85.71 yesterday.

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