UPDATE 3-Whole Foods profit beats, shares jump on view

* Q1 EPS 32 cents vs. Street view of 26 cents

* Raises 2010 sales and earnings forecasts

* Q1 identical-store sales turn positive

* Shares up 8 percent

(Recasts first paragraph, adds analyst comment)

By Lisa Baertlein

LOS ANGELES, Feb 16 (Reuters) - Whole Foods Market Inc WFMI.O boosted its fiscal 2010 sales and earnings forecasts after smarter pricing helped lure back customers and drove quarterly profit above expectations.

Shares jumped 8 percent on the results.

The chain's traditionally higher-income shoppers are returning to the chain, buying more items per trip and so far have spent more money than in 2009 for Super Bowl and Valentine's day, executives said on a conference call.

They added that they're seeing signs that some customers are buying higher-priced items and trading down less.

Over the last year, the supermarket chain referred to by some as "whole paycheck" revamped its pricing and put increased focus on its lower-cost generic products amid intense competition from supermarket chains run by Kroger Co (KR.N), Safeway Inc (SWY.N) and Supervalu Inc (SVU.N).

As a result, closely watched identical-store sales for the high-end food retailer, excluding five relocations and two major expansions, increased 2.5 percent -- ending five quarters of declines.

"I think they're gaining share. That's part of the untold story here," said Jefferies & Co analyst Scott Mushkin.

"I hope it's an indication that the economy is really starting to pick up, but I think it has a lot to do with what they did," said Mushkin. He said Whole Foods got religion when the economy went bad and adjusted its business strategy to put more focus on returns.

PROFIT BOOST

The Austin, Texas-based seller of organic and natural foods said on Tuesday net income was $49.7 million, or 32 cents per share, for the fiscal first quarter ended Jan. 17. That compared with net income of $27.8 million, or 20 cents per share, in the year-earlier quarter.

Analysts, on average, had expected a profit of 26 cents a share in the most recent quarter, according to Thomson Reuters I/B/E/S.

Sales rose 7 percent to $2.64 billion during the quarter, topping analysts' call for $2.60 billion.

Whole Foods on Tuesday raised its 2010 growth estimates: for sales to a range of 8.5 percent to 10.5 percent, comparable store sales of 3.5 percent to 5.5 percent, and identical-store sales of 2.9 percent to 4.9 percent. Same-store sales measure sales at stores open at least a year, while identical-store sales exclude stores that have moved or been renovated.

It previously forecast sales growth of 5 percent to 8 percent, same-store sales growth of 1 percent to 4 percent and identical store sales that are flat to up 3 percent.

Whole Foods also raised its estimates for earnings, excluding items, to a range of $655 million to $685 million from a previous range of $625 million to $650 million, and diluted earnings per share to $1.20 to $1.25 from a previous range of $1.05 to $1.10.

"Given the strong sales momentum we are seeing, there are many reasons to be bullish about our future results," Chief Executive John Mackey said in a statement.

However, he remained cautious.

"It is relatively early in our recovery, however, and there is still a lot of uncertainty regarding where the economy, the consumer, and competition go from here," Mackey said.

Shares of Whole Foods, which closed up 2.6 percent at $30.52 on the Nasdaq, jumped to $32.97 in extended trade.

(Reporting by Lisa Baertlein; Editing by Richard Chang, Phil Berlowitz)