Piper Jaffray analyst, Sean Naughton, noted that deteriorating same store sales at Whole Foods Market (NASDAQ: WFM) were expected but the effectiveness of these investments is in question given the continued deceleration in traffic trends. Whole Foods Q2 comps were below expectations, coming in at (3.0%) versus consensus expectations of (2.0%). Traffic continues to decelerate despite price investments with transactions down 2.1% in the quarter. Whole Foods intends to accelerate the level of price investments in the back half of the year but has been constructive on cost savings to help fund these efforts, reducing salaries and benefits by approximately $35M in the quarter (SG&A improved 39bp year-over-year).

PT drops to $29 from $32, no change to Neutral rating.

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Shares of Whole Foods Market closed at $28.51 yesterday.