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Wednesday, March 28, 2007

Calls of Note Part 2

- Citigroup says that based on checks, they do not believe comps at Whole Foods (NASDAQ:WFMI) have improved from the 7% reported in 1Q07 despite modestly easier prior yr comparisons in 2Q07 (comps were up 11.9% in 2Q06 vs. up 13% in 1Q06). Firm thinks this is due in part to competition by conventional supermarkets.

Given the lackluster trends, they are lowering their 2Q and 07 comp est to 6% from 7% previously. This is at the lower end of guidance of 6-8% comp growth in FY07. Firm is also lowering their FY07-09 EPS by 4c, 6c, and 10c, respectively.

Given lower EPS estimates and lower target multiple which reflects weak trends, they are lowering their target price by $8 to $49. Maintains Hold.

Notablecalls: Looks like more downside in store for WFMI. Not an outright trading call, though.

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