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United Natural's (UNFI) Growth Efforts to Drive Q2 Earnings
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United Natural Foods, Inc. (UNFI - Free Report) is slated to release second-quarter fiscal 2018 results on Mar 8, after the market closes. Notably, the company’s bottom-line results have outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 2.3%.
Considering this, let’s delve into how things are shaping up for this announcement and see if this renowned distributor of natural, organic and specialty food and non-food products can maintain its positive earnings surprise streak.
Factors Likely to Drive United Naturals
Management believes that United Natural is well placed for growth, considering consumers’ demand for the company’s better-for-you food products and services in all channels including supernatural, supermarket, food service and e-commerce. To further improve results, the company laid out several initiatives for 2018 which includes enhancing customer base; expand cheese, deli and meat categories into the broadline distribution channel; improve gross margin; expand e-commerce operations and retain focus on mergers and buyouts. To this end, United Natural is striving to enhance e-commerce space through investments in technology and infrastructure. Driven by these efforts, e-commerce sales surged more than 30% in the first quarter, with food service e-commerce sales recording its highest quarter of year-over-year growth in a while. Management projects robust opportunities in this regard, based on impressive distribution network and solid brands portfolio.
United Natural Foods, Inc. Price, Consensus and EPS Surprise
Acquisitions have also been another vital factor driving United Natural’s performance. The buyouts of Haddon House and Gourmet Guru have been boosting the company’s top line for a while. Such takeovers have helped the company expand resource strength and achieve greater operating scale. Synergies resulting from the integration of the buyouts are expected to benefit performance in the second quarter as well.
All said, United Natural’s stringent focus on growth initiatives along with broad-based improvement in important sales networks have raised management’s hopes to deliver sturdy performance in the second quarter. Alongside first-quarter results, management stated that it continued to witness record sales and shipping unit volumes in the beginning of the second quarter.
Challenges in the Way
We are concerned regarding the grocery industry headwinds that may affect United Natural’s performance. Companies such as ConAgra Foods (CAG - Free Report) and Kellogg (K - Free Report) have been facing stiff competition, due to the growing dominance of industry biggies such as Amazon.com (AMZN - Free Report) . In this regard, tight margins and an aggressive promotional environment pose concerns.
Final Thoughts
Nevertheless, we expect the aforementioned growth drivers to cushion the company from these obstacles and boost growth.
The Zacks Consensus Estimate for earnings for the second quarter has been stable over the past 30 days at 55 cents per share, which depicts a 10% rise from the prior-year quarter. Further, analysts polled by Zacks expect net sales of $2,445 million for the second quarter, reflecting an improvement of 7% from the year-ago quarter.
A Look at the Zacks Model
To top it, our proven model shows that United Natural is likely to beat earnings estimates this quarter. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter..
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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United Natural's (UNFI) Growth Efforts to Drive Q2 Earnings
United Natural Foods, Inc. (UNFI - Free Report) is slated to release second-quarter fiscal 2018 results on Mar 8, after the market closes. Notably, the company’s bottom-line results have outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 2.3%.
Considering this, let’s delve into how things are shaping up for this announcement and see if this renowned distributor of natural, organic and specialty food and non-food products can maintain its positive earnings surprise streak.
Factors Likely to Drive United Naturals
Management believes that United Natural is well placed for growth, considering consumers’ demand for the company’s better-for-you food products and services in all channels including supernatural, supermarket, food service and e-commerce. To further improve results, the company laid out several initiatives for 2018 which includes enhancing customer base; expand cheese, deli and meat categories into the broadline distribution channel; improve gross margin; expand e-commerce operations and retain focus on mergers and buyouts. To this end, United Natural is striving to enhance e-commerce space through investments in technology and infrastructure. Driven by these efforts, e-commerce sales surged more than 30% in the first quarter, with food service e-commerce sales recording its highest quarter of year-over-year growth in a while. Management projects robust opportunities in this regard, based on impressive distribution network and solid brands portfolio.
United Natural Foods, Inc. Price, Consensus and EPS Surprise
United Natural Foods, Inc. Price, Consensus and EPS Surprise | United Natural Foods, Inc. Quote
Acquisitions have also been another vital factor driving United Natural’s performance. The buyouts of Haddon House and Gourmet Guru have been boosting the company’s top line for a while. Such takeovers have helped the company expand resource strength and achieve greater operating scale. Synergies resulting from the integration of the buyouts are expected to benefit performance in the second quarter as well.
All said, United Natural’s stringent focus on growth initiatives along with broad-based improvement in important sales networks have raised management’s hopes to deliver sturdy performance in the second quarter. Alongside first-quarter results, management stated that it continued to witness record sales and shipping unit volumes in the beginning of the second quarter.
Challenges in the Way
We are concerned regarding the grocery industry headwinds that may affect United Natural’s performance. Companies such as ConAgra Foods (CAG - Free Report) and Kellogg (K - Free Report) have been facing stiff competition, due to the growing dominance of industry biggies such as Amazon.com (AMZN - Free Report) . In this regard, tight margins and an aggressive promotional environment pose concerns.
Final Thoughts
Nevertheless, we expect the aforementioned growth drivers to cushion the company from these obstacles and boost growth.
The Zacks Consensus Estimate for earnings for the second quarter has been stable over the past 30 days at 55 cents per share, which depicts a 10% rise from the prior-year quarter. Further, analysts polled by Zacks expect net sales of $2,445 million for the second quarter, reflecting an improvement of 7% from the year-ago quarter.
A Look at the Zacks Model
To top it, our proven model shows that United Natural is likely to beat earnings estimates this quarter. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter..
United Natural’s Earnings ESP of +2.62% combined with the company’s Zacks Rank #2 make us reasonably confident of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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