Stock’s Earnings in Focus: United Natural Foods, Inc. (NASDAQ:UNFI)

United Natural Foods, Inc. (NASDAQ:UNFI) reported earnings for the three months ended April 2016 on June 06, 2016. The company earned $0.76 per share on revenue of $2.13B. Analysts had been modeling earning per share of $0.66 with $2.16B in revenue.

United Natural Foods, Inc. (NASDAQ:UNFI) reported financial results for the third fiscal quarter ended April 30, 2016.

Third Quarter Fiscal 2016 Highlights

  • Net sales increased 0.8% to $2.13 billion compared to $2.11 billion for the same period last fiscal year.
  • Adjusted net sales increased 6.1% compared to the same period last fiscal year, excluding the year-over-year impact of the previously disclosed termination of a customer distribution contract.
  • Gross margin increased to 15.1% compared to 14.5% in the second quarter of fiscal 2016.
  • Net income of $38.3 million, or $0.76 per diluted share

“We are pleased with our solid sequential quarterly improvement in net income,” said Steven Spinner, President and CEO. “Over the last several months our team has worked to significantly expand UNFI’s fresh produce, specialty products and service offerings with the acquisitions of Nor-Cal, Global Organic and Haddon House Food Products. We welcome and look forward to working with the new team members joining the UNFI family. Going forward, we believe these efforts will help support our future growth as we continue to build distribution with new customers and expand relationships with existing customers.”

Net sales for the third quarter of fiscal 2016 increased 0.8%, or $17.5 million, to $2.13 billion from $2.11 billion in the third quarter of fiscal 2015. Adjusted net sales for the quarter increased 6.1% compared to the same period last fiscal year, excluding the year-over-year impact of the previously disclosed termination of a customer distribution contract. The net sales contribution from the acquisitions of Global Organic/Specialty Source, Inc. (“Global Organic”) and Nor-Cal Produce, Inc. (“Nor-Cal”) was approximately $18.1 million, or 0.9% of net sales, for the third quarter of fiscal 2016.

Gross margin decreased 29 basis points to 15.1% for the third quarter of fiscal 2016 compared to 15.4% for the same period last year. The decrease in gross margin was primarily due to competitive pricing pressures, a reduction in fuel surcharges, moderated supplier promotional activity, and a shift in the mix of sales towards lower margin categories. Gross margin for the third quarter of fiscal 2016 increased approximately 59 basis points compared to 14.5% in the second quarter of fiscal 2016. This increase was primarily driven by a sequential improvement in supplier promotional activity and the favorable impact of foreign exchange for the Company’s Canadian business.

Total operating expenses were 12.0% as a percentage of net sales for the third quarter of fiscal 2016, a decrease of 12 basis points compared to the same period last fiscal year. Total operating expenses decreased $0.5 million to $256.4 million for the third quarter of fiscal 2016 compared to $256.9 million in the third quarter of fiscal 2015. Total operating expenses for the third quarter of fiscal 2016 included approximately $0.9 million of acquisition related costs and $1.2 million of startup costs related to the Company’s Gilroy, California facility. Total operating expenses for the third quarter of fiscal 2015 included startup costs of approximately $0.5 million related to the Company’s Hudson Valley, New York and Prescott, Wisconsin facilities offset by a $0.6 million energy grant received as a result of incorporating eligible energy saving designs into the Company’s Hudson Valley, New York facility.

United Natural Foods, Inc. earnings per share showed an increasing trend of 9.7% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 270%.Analysts project EPS growth over the next 5 years at 8.15%. It has EPS annual growth over the past 5 fiscal years of 11.9% when sales grew 16.9. It reported 0.8% sales growth, and -8.4% EPS decline in the last quarter.

The stock is trading at $45.74, up 53.75% from 52-week low of $29.75. The stock trades down -29.52% from its peak of $64.9 and % below the consensus price target of $42.13. Its volume clocked up at 0.49 million shares which is lower than the average volume of 0.72 million shares. Its market capitalization currently stands at $2.27B.

Bookmark the permalink.

Comments are closed.