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Whole Foods shares took a spill in extended trading after the upscale grocer lowered its outlook for the full-year and said it is uncertain how long the fall in food prices will last.

The Texas-based company said it now expects sales growth of at least 1.5 per cent in fiscal 2017, compared with its previous projection of growth between 2.5 and 4.5 per cent. That was also shy of Wall Street’s outlook of 3.4 per cent.

Meanwhile, its estimate of diluted earnings of $1.33 a share or greater, came up short of its previous outlook of $1.42 or greater, excluding any potential share repurchases. It also compared with Wall Street expectations of $1.44.

Whole Foods said the updated outlook reflected year-to-date sales trends and lost sales tied to store closures. “While the Company remains hopeful that comps improve as sales-building initiatives gain traction and comparisons get easier, the competitive landscape continues to be very dynamic, two-year comps have continued to moderate, and it is uncertain how long the deflationary environment will continue,” the company said.

The company also warned that with Easter falling in the third quarter this year, compared with the second quarter in 2016, it would impact comparable store sales figures in the current quarter.

That came alongside first quarter profits that slid to $95m or 30 cents a share, compared with $157m or 47 cents a share in the year ago period. Adjusting for one-time items earnings of 39 cents were in line with estimates. Profits were impacted by charges tied to store closures and a $13m charge associated with Walter Robb’s separation agreement. Mr Robb stepped down as co-CEO at the end of last year, ending the co-CEO structure that had been in place since 2010.

Sales rose 1.9 per cent to a record $4.9bn, just shy of estimates for $4.98bn. Meanwhile, like-for-like sales, a key industry metric, declined 2.4 per cent, steeper than expectations for a 1.7 per cent drop.

Whole Foods has struggled with a price perception problem. While consumer preference for healthier, organic food has intensified competition from rivals such as Sprouts Farmers Market, Trader Joe’s and Kroger they have also cited lower price points as a reason for choosing rivals.

In response to such criticism, the grocer has worked to highlight its daily deals and launched its 365 Whole Foods store format that boasts lower prices and is aimed at millennials.

Whole Foods shares fell more than 4 per cent in extended trading and are down 4.6 per cent so far this year. They fell 47 per cent over the previous three years.

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