A 5% rise in Whole Foods (NasdaqGS: WFMI) in Thursday’s premarket could have investors hungering for exchange traded funds (ETFs) that track consumer staples, as well as the food and beverage sector.
Whole Foods after Wednesday closing bell reported quarterly earnings and lifted its 2011 profit outlook.
“Whole Foods reported another strong beat and raise quarter, as they continue to execute on delivering improved value and a differentiated offering. The beat was driven by strong leverage of occupancy costs and direct store expense,” said analysts at Deutsche Bank.
“Cash flow generation was strong, and all long-term debt has now been repaid, providing flexibility to ramp-up new stores or return more cash to shareholders. Current valuation reflects improving sales and margin trends, and anticipated pick-up in square foot growth,” said Deutsche Bank, which has a hold rating on the stock.
Whole Foods is a component in First Trust Consumer Staples AlphaDEX Fund (NYSEArca: FXG) and PowerShares Dynamic Food and Beverage (NYSEArca: PBJ).
PowerShares Dynamic Food and Beverage