PROVIDENCE – United Natural Foods Inc. reported net income of $57.1 million in the company’s fiscal 2019 third quarter ended April 27, a 10.1% increase year over year, the company reported Thursday. Earnings per diluted share were $1.12, compared with $1.02 one year prior.
Company revenue was $6 billion for the quarter, a jump from $2.7 billion one year prior. The increase was attributed to sales at Supervalu, the acquired supermarket chain that the company is in the processes of integrating while divesting itself of the company’s retail banners and stores.
The company had lost $303.9 million fiscal year to date by April 27, largely due to the acquisition of Supervalu. At the same time of year in fiscal 2018, fiscal year to date profit for the company was $132.9 million. The purchase price of Supervalue was roughly $2.9 billion. In the fiscal second quarter, the company incurred a goodwill impairment charge of $370.9 million and $47.1 million in restructuring, acquisition and integration expenses related to the acquisition.
Fiscal third quarter UNFI channel sales:
- Supernatural channel reported $1.1 billion in sales. The company said this primarily consist of sales to Amazon.com Inc.’s Whole Foods Market
- Independents: $829 million in sales
- Supermarkets: $3.7 billion in sales, including sales at Supervalu
- Other: $357 million
The company attributed the increase in its profit for the quarter to contributions from Supervalu and a benefit from a goodwill impairment charge adjustment, although on a profit margin basis, the fiscal third-quarter margin of 1% was roughly half the margin in the fiscal 2018 third quarter.
The company said that it will continue to review its organizational structure going forward, seeking to “dispose of and exit the Supervalu legacy retail,” as it divests from retail operations and focuses on it wholesale business. That switch will result in headcount reductions and other costs and charges, according to the company.
The company said that $24.4 million of profit for the quarter was related to discontinued operations. Income was also offset by $21.4 million in restructuring and closed property charges.
“Our transformational journey continues, and I’m proud of what our team has accomplished this quarter,” said Steven L. Spinner, chairman and CEO of UNFI. “I am excited about our next chapter and the acceleration of value creation we expect to realize from the scale, services and assortment that only UNFI can deliver.”
Long-term debt and capital lease obligations at the end of the period totaled $3.1 billion, compared with $321.3 million a year earlier.
Total assets at the end of the company’s fiscal third quarter were $7.3 billion, an increase from $3.1 billion one year prior.
Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.
