Cramer: They Were Wrong About Whole Foods
NEW YORK (Real Money) --Younger people hate the food chain. It's like Ronald Reagan with Russian missiles. He was willing to trust them, but he wanted to verify. The millennials, who will be about 30% of this country in a half-dozen years, want their food vetted and verified.
That's exactly what Whole Foods
Now Whole Foods just reported a terrific quarter that saw the stock shoot up 10 points before proceeding to advance three more points. This is another stock that didn't fill in the gap once it took off because we are in a much more powerful market than most understand or think about. The stock had spent a lot of time in the low-$80s wilderness as growth-stock portfolio managers had become convinced that the ardor for "expensive" public stores that sell organic food had dimmed. In their place, went the thinking, had come initiatives from Target
I never thought Whole Foods lost a step, and I stuck by that. But, more important, the company heard what was wrong, adjusted, cut expenses, cut shrinkage, improved the supply chain and introduced some lower-priced merchandise that brought the numbers right back up and then some.
Plus, with the lack of cannibalization in what was thought to be the saturated area around Boston, the company hinted that that its total target goal for 1,000 U.S. stores could be low. It has about 350 locations currently.
The company achieved same-store sales success of the 21 stores in college-filled Massachusetts, almost double the locations it has in New York State -- and that's not to mention the instant hit that is the store in South Bend, Ind., home of Notre Dame. I think that, in light of this, you could argue that every college needs a Whole Foods nearby because of the millennials' desire for healthier eating.