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United Natural Foods (UNFI) Rise on Q1 Earnings & Sales Beat
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United Natural Foods, Inc. (UNFI - Free Report) has seen its shares rise 6.2% in the pre-market session, following the company’s robust first-quarter fiscal 2022 results, wherein the top and bottom lines advanced year over year and beat the Zacks Consensus Estimate. Management has reiterated its view for fiscal 2022.
United Natural’s adjusted earnings of 97 cents per share improved 90.2% year over year and surpassed the Zacks Consensus Estimate of 61 cents. The increase can be attributed to higher adjusted EBITDA, improved margins and lower interest expenses.
Net sales from continuing operations of $6,997 million beat the Zacks Consensus Estimate of $6,820 million and improved 4.7% year over year. On a two-year stack basis, net sales rose 10.7%. Results gained from continued demand for at-home food solutions. Accelerating inflation, and gains from existing and new customers, including benefits from cross-selling, were also drivers. This was partly offset by a slight decline in retail sales due to the cycling of strong sales in the past year.
The company’s gross margin of 14.89% improved 38 basis points (bps) from 14.51% reported in the year-ago quarter. The upside was mainly backed by the enhancement in the Wholesale segment’s gross margin, whereas the retail gross margin rate declined year over year modestly.
The adjusted operating income was $100 million in the reported quarter compared with $66 million in the year-ago quarter. The adjusted operating margin of 1.57% expanded 58 bps from the year-ago period’s 0.99%. The adjusted EBITDA improved 18.7% year over year to $189 million.
The operating expense rate declined 20 bps year over year to 13.32% in the fiscal first quarter, driven by the leveraging of fixed operating and administrative expenses, and reduced distribution center start-up and consolidation costs. This was partly negated by elevated transportation costs, the temporary, voluntary closure of a distribution center, and investments in distribution center laborers.
The Zacks Rank #1 (Strong Buy) stock has rallied 34.1% in the past three months against the industry’s decline of 2.7%.
Image Source: Zacks Investment Research
Other Updates
The company ended the fiscal first quarter with cash and cash equivalents of $46 million, long-term debt of $2,376 million, and total shareholders’ equity of $1,587 million. Net cash used in operating activities amounted to $81 million as of Oct 30, 2021.
Fiscal 2022 Guidance
Management reiterated its fiscal 2022 guidance. For fiscal 2022, it anticipates net sales of $27.8-$28.3 billion, adjusted EBITDA of $760-$790 million and adjusted earnings of $3.9-$4.20 per share. At the mid-point, all the metrics suggest a 4% rise each from the fiscal 2021 reported levels.
The company expects a capital expenditure of $300 million for fiscal 2022.
MGP Ingredients, the producer and supplier of distilled spirits, and specialty wheat proteins and starch food ingredients, currently sports a Zacks Rank #1. Shares of the company have jumped 33.2% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share (EPS) suggests growth of 55.5% and 61.4%, respectively, from the year-ago period’s reported figures. MGPI has a trailing four-quarter earnings surprise of 117.6%, on average.
The Hain Celestial, which provides various natural and organic foods as well as personal care products in North America and Europe, carries a Zacks Rank #2 (Buy) at present. HAIN has a trailing four-quarter earnings surprise of 9.7%, on average. Shares of the company have risen 3% in the past three months.
The Zacks Consensus Estimate for The Hain Celestial’s current financial-year EPS suggests growth of 14.5% from the year-ago period’s reported number.
The J. M. Smucker is a leading marketer and manufacturer of consumer food and beverage products, and pet food and pet snacks in North America. It currently carries a Zacks Rank #2. SJM has a trailing four-quarter earnings surprise of 10.8%, on average. Shares of the company have gained 7.8% in the past three months.
The Zacks Consensus Estimate for The J. M. Smucker’s current financial-year sales suggests growth of 0.1% from the year-ago period’s reported figures. SJM has an expected EPS growth rate of 1.2% for three-five years.
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United Natural Foods (UNFI) Rise on Q1 Earnings & Sales Beat
United Natural Foods, Inc. (UNFI - Free Report) has seen its shares rise 6.2% in the pre-market session, following the company’s robust first-quarter fiscal 2022 results, wherein the top and bottom lines advanced year over year and beat the Zacks Consensus Estimate. Management has reiterated its view for fiscal 2022.
United Natural’s adjusted earnings of 97 cents per share improved 90.2% year over year and surpassed the Zacks Consensus Estimate of 61 cents. The increase can be attributed to higher adjusted EBITDA, improved margins and lower interest expenses.
Net sales from continuing operations of $6,997 million beat the Zacks Consensus Estimate of $6,820 million and improved 4.7% year over year. On a two-year stack basis, net sales rose 10.7%. Results gained from continued demand for at-home food solutions. Accelerating inflation, and gains from existing and new customers, including benefits from cross-selling, were also drivers. This was partly offset by a slight decline in retail sales due to the cycling of strong sales in the past year.
The company’s gross margin of 14.89% improved 38 basis points (bps) from 14.51% reported in the year-ago quarter. The upside was mainly backed by the enhancement in the Wholesale segment’s gross margin, whereas the retail gross margin rate declined year over year modestly.
The adjusted operating income was $100 million in the reported quarter compared with $66 million in the year-ago quarter. The adjusted operating margin of 1.57% expanded 58 bps from the year-ago period’s 0.99%. The adjusted EBITDA improved 18.7% year over year to $189 million.
The operating expense rate declined 20 bps year over year to 13.32% in the fiscal first quarter, driven by the leveraging of fixed operating and administrative expenses, and reduced distribution center start-up and consolidation costs. This was partly negated by elevated transportation costs, the temporary, voluntary closure of a distribution center, and investments in distribution center laborers.
The Zacks Rank #1 (Strong Buy) stock has rallied 34.1% in the past three months against the industry’s decline of 2.7%.
Other Updates
The company ended the fiscal first quarter with cash and cash equivalents of $46 million, long-term debt of $2,376 million, and total shareholders’ equity of $1,587 million. Net cash used in operating activities amounted to $81 million as of Oct 30, 2021.
Fiscal 2022 Guidance
Management reiterated its fiscal 2022 guidance. For fiscal 2022, it anticipates net sales of $27.8-$28.3 billion, adjusted EBITDA of $760-$790 million and adjusted earnings of $3.9-$4.20 per share. At the mid-point, all the metrics suggest a 4% rise each from the fiscal 2021 reported levels.
The company expects a capital expenditure of $300 million for fiscal 2022.
3 Appetizing Picks
Some other top-ranked stocks are MGP Ingredients (MGPI - Free Report) , The Hain Celestial Group (HAIN - Free Report) and The J. M. Smucker Co. (SJM - Free Report) .
MGP Ingredients, the producer and supplier of distilled spirits, and specialty wheat proteins and starch food ingredients, currently sports a Zacks Rank #1. Shares of the company have jumped 33.2% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share (EPS) suggests growth of 55.5% and 61.4%, respectively, from the year-ago period’s reported figures. MGPI has a trailing four-quarter earnings surprise of 117.6%, on average.
The Hain Celestial, which provides various natural and organic foods as well as personal care products in North America and Europe, carries a Zacks Rank #2 (Buy) at present. HAIN has a trailing four-quarter earnings surprise of 9.7%, on average. Shares of the company have risen 3% in the past three months.
The Zacks Consensus Estimate for The Hain Celestial’s current financial-year EPS suggests growth of 14.5% from the year-ago period’s reported number.
The J. M. Smucker is a leading marketer and manufacturer of consumer food and beverage products, and pet food and pet snacks in North America. It currently carries a Zacks Rank #2. SJM has a trailing four-quarter earnings surprise of 10.8%, on average. Shares of the company have gained 7.8% in the past three months.
The Zacks Consensus Estimate for The J. M. Smucker’s current financial-year sales suggests growth of 0.1% from the year-ago period’s reported figures. SJM has an expected EPS growth rate of 1.2% for three-five years.