Whole Foods Just Got Slammed for Its 'World's Healthiest' Claim
As if Whole Foods Market wasn't getting hammered enough by investors following its fiscal third-quarter earnings release on Wednesday, the company is now taking a hit from the U.S. Patent and Trademark Office.
The grocery chain, which currently claims it's "America's Healthiest Grocery Store," attempted to update its advertising slogan to "World's Healthiest Grocery Store" but was rejected by the agency, according to The Washington Post.
The U.S. Patent and Trademark Office rejected the trademark on the basis that the claim was an exaggeration and can't be proven or has not been proven to be true, the report said.
The attempted slogan change comes as Whole Foods looks to expand its brand globally. Currently, the company has chains in the United States, Canada and the United Kingdom.
However, it has its share of troubles at home. Weak sales, a competitive environment and declining food prices could be major headwinds for it moving forward. Shares in the company were down more than 8 percent midmorning Thursday.
"We are seeing some encouraging signs in terms of our sales and believe our nine-point plan will produce strong returns for our shareholders over the long term," Walter Robb, co-chief executive officer of Whole Foods, said in a statement.
Almost a dozen analysts lowered their September 2016 estimates for the company on Thursday, according to FactSet.
"We are encouraged by 365 and other behind-the scenes initiatives, but believe it's prudent to wait for signs WFM is reaccelerating legacy business trends in FY17 before warranting a premium multiple needed to justify owning shares," Phil Terpolilli, an analyst at Wedbush, wrote in a research note Thursday.
So far, the grocer has opened two 365 by Whole Foods Market stores, which are smaller stores that hope to create a more budget-friendly image. The plan is to build the format to more than 1,200 stores eventually.
Whole Foods' trademark attempt suggests the company may be eyeing further international expansion at some point. However, in Wednesday's earnings release, the retailer focused on its expansion in the U.S. calling out leases it signed in Los Angeles, New York City, Pittsburgh and Atlanta.
The company didn't reply to interview requests, according to the Post article.