I'm a stock market dabbler. I don't really have enough money to truly invest, but I dabble, and buy stock in companies that I think are doing the right things, that I like to shop at, and that I feel good about their future. One company that I've invested in is Whole Foods -- as I think they are a responsible company and I believe that our future is headed toward more organics.
However, this morning, Whole Foods announced that they expect 6-8% increases in their same-store sales -- in spite of averaging double digit growth in same store sales over the past 3 years. The conventional markets have become more competitive," Chief Executive John Mackey said on a conference call on Thursday. "Competition is tougher. No question about it." Mackey pointed to increased competition from smaller places like Trader Joes and larger grocers like Wal-Mart getting into organics.
This is not news, really. Wal-Mart announced their entry into organics months ago and Trader Joes has been around for years. Yet, at the sound of the "news", Whole Foods' stock price has dropped nearly $17 -- which is nearly 30% of its stock price.
It's just kind of silly. Their projections are STILL FOR GROWTH. And honestly, the core Wal Mart consumer and the core Whole Foods consumer are not the same people...in fact, the core Whole Foods consumer (I'm one of them) wouldn't be caught dead in a Wal-Mart. And yet, the market over-reacts.
I say this because this is an example of why I would not want to work for one of the large advertising conglomerates. The market does not tolerate changes that are good for long-term growth, but bad for the short term. Independent companies have for flexibility to make adjustments that may hurt a bit in the short term, but stage themselves better for the long term. Barkley is going through one of those phases right now...we're making a lot of changes to put ourselves in a great position for long-term growth. It's exciting. It's a bit scary. But it's the right thing to do. And we can only do it because we are an independent company. I wouldn't have it any other way...