Editor's Note: Below is a brief explanation from Hedgeye CEO Keith McCullough. Please note that our Restaurants team will send out a full report outlining our high-conviction long thesis.
Got patience? We do.
Whole Foods (WFM) is not only a name we told you to short back in 2013, but one we have been patiently waiting and watching for a bottoming process to begin. Our Restaurants analyst Howard Penney thinks the beginning of that process is now. Remember, tops and bottoms are processes, not points.
The stock is down hard today on Sprouts (SFM) punting on sales. But the #ConsumerSlowing is only new to non-Hedgeye subscribers. And it's definitely not new for Whole Foods, who was already expected to comp negative.
Is this an immediate-term TRADE oversold signal? Yes. But it's also call on the secular shift the company is making to become more competitive.
"Whole Foods is a great brand and one day the financial performance will be that of a strong company." -Howard Penney
