Being one of the leading natural and organic foods supermarkets, Whole Foods Market Inc. (WFMI) offers investors one of the strongest growth profiles in the industry with its strong brand image, and marketing and merchandising expertise. The stock is poised to surge once the economy revives and demand for healthier and natural food improves.

Whole Foods has been spurring its revenues through new store openings, acquisitions and comparable-store sales growth. Given the food retailing industry is highly fragmented, the company has been able to maintain a track record of successful integration of its regional acquisitions.

The stringent cost-control measures, effective inventory management, and improved store-level performance are driving earnings growth. Whole Foods also has been revamping its pricing strategy and concentrating more on value offerings, while maintaining healthy margins. In the last five fiscal years, gross margin has been in the range of 34% to 35.1%.

Whole Foods has been prudent in opening new stores with 15 stores in fiscal 2009 and 16 in 2010. However, Whole Foods hinted that it wants to accelerate its pace in the coming years with plans of opening 17 stores in fiscal 2011 and 20 in fiscal 2012 with a moderate opening of 14 more stores in 2013.

Whole Foods has been also actively managing its cash flows, by generating significant free cash and making capital investments judiciously. Buoyed by a healthy financial position and robust outlook, the company's board of directors re-established the quarterly dividend, after a hiatus of more than two years. The board approved a quarterly dividend of 10 cents a share payable on January 20, 2011.

During fiscal 2010, Whole Foods generated operating cash flows of $585.3 million and incurred capital expenditures of $256.8 million, which resulted in free cash flows of $328.5 million.

For fiscal 2011, Whole Foods now expects an increase of 10–12% in total sales, driven by a 5.5–7.5% rise in comparable-store sales and a 5–7% growth in identical-store sales. The company guided earnings in the range of $1.66 to $1.71 per share, and anticipates capital expenditures between $350 million to $400 million for the year. The company had previously projected earnings in the range of $1.59 to $1.64 per share.