UNFI sees Q2 profit narrow to $19M; curbs outlook

PROVIDENCE – United Natural Foods Inc. earned a $19 million profit in the fiscal second quarter that ended Jan. 28, or 31 cents per diluted share, the company reported Wednesday. 

One year prior, the natural and organic food company reported a profit of $66 million, or $1.08 per diluted share. 

The results did not meet Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of $1.38 per share.

Quarterly sales totaled $7.8 billion, an increase from $7.4 billion one year prior. 

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“Our second quarter sales grew over 5% compared to the prior year as more customers bought more categories, private brands, and professional services driving sales to over $7.8 billion,” said Sandy Douglas, UNFI’s CEO. “While I’m pleased with our continued sales growth … profits were challenged, as we did not repeat the significant level of procurement gains from rapidly accelerating inflation and inventory gains, due to supply chain volatility, that we experienced in the second quarter of last year. As a result of these challenges, we are reducing our profitability expectations for fiscal 2023 and withdrawing our fiscal 2024 targets.”

UNFI revenue channels for the fiscal second quarter:

  • The company’s sales to chains totaled $3.3 billion, a rise of 2.4% year over year.
  • Sales to independent retailers totaled $1.98 billion, a 3.9% increase year over year.
  • Sales to “supernatural” stores, including Whole Foods Market, totaled $1.6 billion, a rise of 14.2% year over year.
  • Retail sales totaled $660 million, a rise of 2.6% year over year.
  • Sales classified as “other” totaled $609 million, a rise of 4.8% year over year.

In July, UNFI announced a new leadership structure that it says will allow the Providence-based grocery wholesaler to focus on four areas of the business with growth potential.

The restructuring was part of the company’s “Fuel the Future” strategy launched in June 2021 and in preparation for the fiscal year which began in August.

UNFI said leadership teams were assigned to four “growth platforms”: services, wholesale, retail and corporate business transformation and each team leader will report to Douglas.

United Natural said in its report Wednesday it expects full-year earnings in the range of $3.05 to $3.90 per share, with revenue in the range of $30.1 billion to $30.5 billion.

Material from The Associated Press was used in this report.