New York City On Thursday, Standard & Poor's Rating Services lowered its outlook on Whole Foods Market Inc. to "negative" from "stable." S&P cited concerns about the grocer's sales as the rationale behind the lowered outlook.
S&P also affirmed the "BB-" corporate credit rating on the Austin, Texas-based company.
Whole Foods reported Wednesday that its first-quarter profit fell but beat analyst expectations. Total sales were flat for the quarter but identical-store sales slipped.
According to a report in the Associated Press, Standard & Poor's credit analyst Stella Kapur said the lowered rating is based on weaker-than-anticipated operating performance for the first quarter and an increased concern that the company's credit metrics could deteriorate further if its identical sales continue to fall.
While Whole Foods grew sales at a 20% compound annual growth rate from 2003 to 2008 from healthy same-store sales growth, new store development and acquisitions, Kapur said the weaker U.S. economy and its dampening effect on consumer spending has hurt operating performance.