Major Whole Foods' Shareholder Wants Company To Consider Selling Itself

In its most recent earnings report, Whole Foods said it would close some stores and increase use of customer data, as well as cut its full-year sales and profit forecasts, hit by its sixth straight quarter of same-store sales declines.

The Wall Street Journal reports that today, activist investor Jana Partners and some allied companies bought nearly a 9% stake in Whole Foods, becoming the chain's second-largest investor.

Shares of Whole Foods Market (NASDAQ:WFM) jumped as much as 11.7% on Monday afternoon, starting with a sharp surge at 2:30 p.m. ET. These investors - including former grocery analyst Meredith Adler, former Harris Teeter CEO Tad Dickson and former Gap CEO Glenn Murphy - have signed with Jana as potential board nominees for election at Whole Foods' 2018 annual meeting. Diane Dietz, former chief marketing officer at Safeway, and food writer Mark Bitman are working with the hedge fund. The Journal said Jana would pressure Whole Foods to update its technology more quickly, shake up its board of directors and test the waters to see how much it might fetch in a sale.

Whole Foods' stock has risen 4% over the past 12 months, compared with a 15% gain in the S&P 500, and has lost more than half its value since peaking in 2013.

Whole Foods had been attempting to trim its costs by closing nine stores and abandoning a goal to open 1,200-plus stores. "Going forward, Whole Foods Market will focus on serving this growing niche of customers better than ever before".

The comments suggests that Jana Partners could launch a contest if no review is forthcoming. UNFI stock dropped by more than 8% following the filing.

  • Zachary Reyes