UNFI Posts Slight Q2 Sales Uptick

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UNFI Posts Slight Q2 Sales Uptick

03/08/2016

United Natural Foods (UNFI) has reported a 1.5 percent net sales increase to $2.05 billion for the second fiscal quarter ended Jan. 30, 2016, from the $2.02 billion posted in the year-ago period.

Adjusted net sales grew 6.5 percent from the same period last year, excluding the year-over-year impact of the termination of a customer distribution contract and, for Q2 2015, a nonrecurring reduction in net sales.

The Providence, R.I.-based company also revealed that through a wholly owned subsidiary, Albert’s Organics Inc., it has acquired certain assets of Sarasota, Fla.-based Global Organic/Specialty Source Inc. and some of its related affiliates. Founded in 1999, Global Organic is a distributor with primary operations located within the same facility as UNFI in Sarasota. Global Organic’s operations will be combined with the company’s existing Albert’s business in the Southeast.

Late last month, UNFI said it was acquiring Medford, N.J.-based specialty food distributor, importer and exporter Haddon House Food Products.

“We are intently focused on managing our business in a rapidly changing environment,” noted UNFI President and CEO Steven Spinner. “We will make strategic investments to improve our sales growth rate and customer experience through the back half of this fiscal year and into fiscal 2017. We are working to build new distribution opportunities and expand our relationships with current customers. … [T]he acquisition of certain assets of Global Organic further demonstrates our strategic focus on increasing UNFI’s product offering into the perishable perimeter. We believe our infrastructure, supply chain and logistics network are uniquely positioned to add meaningful value to customers in an evolving food retail environment.”

Net income for Q2 2016 declined $5.2 million to $22.7 million, or 45 cents per diluted share, from $27.8 million, or 55 cents per diluted share, last year. Excluding $2 million of restructuring costs and about $1 million of acquisition-related costs, adjusted net income dropped $8.1 million to $24.5 million, or 49 cents per diluted share, compared with $32.5 million, or 65 cents per diluted share, in year-ago period, which excludes the effect of the nonrecurring net sales reduction.

Net sales for the six months ended Jan. 30 came to $4.12 billion, a 2.9 percent increase from last year; adjusted net sales rose 6.7 percent versus the year-ago period.

Net income fell $8.1 million, or 13.3 percent, to $52.8 million, or $1.05 per diluted share, from $60.9 million, or $1.21 per diluted share last year. Excluding $4.8 million of severance and other transition costs and about $1 million of acquisition-related costs in the six months ended Jan. 30, adjusted net income dropped $9.3 million, to $56.3 million, or $1.12 per diluted share, versus $65.6 million, or $1.31 per diluted share, in the year-ago period, which excludes the impact of the nonrecurring net sales reduction.

For fiscal 2016, UNFI estimates net sales in the range of around $8.31 billion to $8.43 billion, an increase of about 1.5 percent to 3 percent over fiscal 2015.

UNFI carries and distributes more than 85,000 products to 40,000-plus customer locations in the United States and Canada. The company serves a wide variety of retail formats, including conventional supermarket chains, natural product superstores, independent retail operators and the foodservice channel.