PROVIDENCE, R.I. - United Natural Foods , Inc. (NYSE: NYSE:UNFI) reported its financial outcomes for the second quarter of fiscal 2024, ending January 27, 2024, with mixed results.
The company achieved an adjusted EPS of $0.07, surpassing the analyst estimate which predicted a loss of $0.02. However, revenue slightly declined by 0.5% to $7.78 billion, falling short of the consensus estimate of $7.87 billion.
The company's net sales dip was primarily attributed to a decrease in unit volumes, somewhat mitigated by inflation and new business within the Supernatural channel. Gross profit also saw a downturn of 3.2% to $1.0 billion, with a gross profit rate of 13.3% including a $6 million LIFO charge. Adjusted EBITDA experienced a more significant reduction of 29.3% to $128 million.
United Natural Foods has revised its fiscal 2024 outlook, lowering net sales expectations while maintaining and narrowing the midpoints for net income, EPS, adjusted EPS, and adjusted EBITDA. The updated full-year outlook anticipates net sales ranging from $30.5 to $31 billion, a downward adjustment from the prior forecast of $30.9 to $31.5 billion. This revision places the company's sales outlook below the analyst consensus of $31.298 billion.
For adjusted EPS, the company now expects a range of -$0.56 to $0.06, which is notably below the analyst consensus of $0.60. The midpoint of the guidance range, -$0.25, is considerably lower than the consensus estimate.
Sandy Douglas, UNFI’s CEO, commented on the results, highlighting the company's focus on execution and profitability improvement during the critical holiday season. "Greater than anticipated benefits from our near-term value creation initiatives and further advances in managing shrink partially offset the expected reduction in procurement gains and start-up costs associated with a new distribution center," said Douglas.
Despite the mixed financial performance, UNFI is progressing with its operational efficiency and execution, with automation systems set to go live in Centralia, WA, this spring, and announced automation at the Manchester, PA distribution center. The company is also optimizing its northeast distribution center, expected to complete in Fiscal 2025.
The company's operational improvements, including shrink reduction and network optimization, are part of its ongoing transformation to become a more efficient and effective partner to its customers while enhancing profitability and long-term shareholder value.
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