$WFMI JP Morgan recently conducted a store tour at the Whole Foods Market store in London Full Report here

We recently conducted a store tour at the Whole Foods Market store in London –
Kensington with Global V.P. of Investor Relations, Cindy McCann, U.K. Region
President, Jeff Turnas, and Store Team Leader Jade Hoai. The bottom line is that
similar to trends in the U.S., Whole Foods’ U.K. business is making a turn for the
better on all lines of the P&L. Moreover, we believe that management is once again
committed to expansion and developing a long-term presence in the U.K. market –
which should help the company leverage heavy overhead costs in the region.
Furthermore, with large stores like Kensington (and a handful of U.S. locations)
steadily increasing sales and making progress toward achieving target margins (ability
to leverage labor costs), we expect to see a benefit to direct store expenses down the
road.

Although the scope of our tour was limited to the U.K. market, we did get the sense
that the U.S. business continues to do extremely well – driven by strong sales trends
(e.g., increase in customer traffic/items per basket). As such, we are raising our FY10
EPS estimate to $1.38 from $1.30 (guidance of $1.20-$1.25) and FY11 EPS to $1.55
(from $1.50) and increasing our December 2010 PT to $43 (from $39). Looking
ahead, with skeptics still plentiful (only 40% sell-side ‘buy’ ratio and 13.0% short
interest), we’ll continue to take the other side and remain Overweight.


$WFMI We recently conducted a store tour at the Whole Foods Market store in London – Kensington with Global V.P. of Investor Relations, Cindy McCann, U.K. Region President, Jeff Turnas, and Store Team

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