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United Natural (UNFI) Q2 Earnings Top Estimates, Sales Fall Y/Y
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United Natural Foods, Inc. (UNFI - Free Report) posted second-quarter fiscal 2024 results, wherein the top and bottom lines declined year over year, and net sales missed the Zacks Consensus Estimate. Management lowered its net sales guidance for fiscal 2024 while narrowing its adjusted EBITDA and bottom-line guidance range.
Nonetheless, the results underscore the commitment and advancements made by the company toward execution and profitability enhancement during the crucial holiday period. UNFI experienced greater-than-expected advantages from short-term strategies aimed at value creation, alongside witnessing notable progress in shrink management, which helped offset the anticipated decrease in procurement benefits and expenses associated with launching a new distribution center.
Quarter in Detail
United Natural’s adjusted earnings came in at 7 cents per share, which beat the Zacks Consensus Estimate of 1 cent. However, the bottom line slumped 91% from 78 cents reported in the year-ago period.
United Natural Foods, Inc. Price, Consensus and EPS Surprise
Net sales inched down 0.5% to $7,775 million, missing the Zacks Consensus Estimate of $7,918 million. The downside can be attributed to lower unit volumes, partly compensated by inflation and new business with existing customers, mainly in the company’s Supernatural channel.
Chains, Independent retailers and Retail witnessed a sales decline of 1.7%, 3.7% and 4.4%, respectively. Supernatural and Other channels rose 5.5% and 1%, respectively.
United Natural’s gross profit fell 3.2% to $1,035 million. Excluding the non-cash LIFO charge in both periods, the gross margin contracted 60 basis points to 13.4% in the second quarter due to reduced levels of procurement gains stemming from decelerating inflation.
Operating expenses were $1,010 million compared with $1,002 million reported in the year-ago quarter. Excluding business transformation costs, operating expenses came in at 12.8% of net sales, in line with the year-ago period.
Adjusted EBITDA came in at $128 million, down from the $181 million reported in the year-ago quarter.
Other Updates
This Zacks Rank #3 (Hold) company ended the quarter with total liquidity of nearly $1.43 billion, including cash of nearly $34 million and a borrowing capacity of about $1.40 billion under the company’s asset-backed lending facility. Total outstanding debt (net of cash) was $2.16 billion, down $124 million on a sequential basis.
During the second quarter, United Natural’s free cash flow amounted to $116 million, with net cash provided by operating activities being $183 million.
Fiscal 2024 Guidance
For fiscal 2024, the company anticipates net sales in the range of $30.5-$31.0 billion compared with the prior view of $30.9-$31.5 billion.
Adjusted EBITDA is now expected in the $475-$525 million range compared with the $450-$550 million range forecasted earlier.
UNFI now expects to deliver a net loss of $101-$65 million in fiscal 2024 compared with a net loss of $120-$46 million expected earlier.
United Natural now envisions the fiscal 2024 bottom line between a loss of 56 cents and earnings of 6 cents. Management had earlier guided the bottom line between a loss of 88 cents per share and earnings of 38 cents.
The company still projects capital expenditures of nearly $400 million for fiscal 2024.
UNFI’s stock has tumbled 22.9% in the past three months against the industry’s growth of 3.2%.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings indicates growth of 15.2% and 3.4%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29% from the year-ago reported figure.
Celsius Holdings (CELH - Free Report) , a functional energy drink and liquid supplement company, currently carries a Zacks Rank #2. CELH has a trailing four-quarter earnings surprise of 67.4%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal year sales and earnings suggests growth of 41.6% and 37.8%, respectively, from the year-ago period numbers.
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United Natural (UNFI) Q2 Earnings Top Estimates, Sales Fall Y/Y
United Natural Foods, Inc. (UNFI - Free Report) posted second-quarter fiscal 2024 results, wherein the top and bottom lines declined year over year, and net sales missed the Zacks Consensus Estimate. Management lowered its net sales guidance for fiscal 2024 while narrowing its adjusted EBITDA and bottom-line guidance range.
Nonetheless, the results underscore the commitment and advancements made by the company toward execution and profitability enhancement during the crucial holiday period. UNFI experienced greater-than-expected advantages from short-term strategies aimed at value creation, alongside witnessing notable progress in shrink management, which helped offset the anticipated decrease in procurement benefits and expenses associated with launching a new distribution center.
Quarter in Detail
United Natural’s adjusted earnings came in at 7 cents per share, which beat the Zacks Consensus Estimate of 1 cent. However, the bottom line slumped 91% from 78 cents reported in the year-ago period.
United Natural Foods, Inc. Price, Consensus and EPS Surprise
United Natural Foods, Inc. price-consensus-eps-surprise-chart | United Natural Foods, Inc. Quote
Net sales inched down 0.5% to $7,775 million, missing the Zacks Consensus Estimate of $7,918 million. The downside can be attributed to lower unit volumes, partly compensated by inflation and new business with existing customers, mainly in the company’s Supernatural channel.
Chains, Independent retailers and Retail witnessed a sales decline of 1.7%, 3.7% and 4.4%, respectively. Supernatural and Other channels rose 5.5% and 1%, respectively.
United Natural’s gross profit fell 3.2% to $1,035 million. Excluding the non-cash LIFO charge in both periods, the gross margin contracted 60 basis points to 13.4% in the second quarter due to reduced levels of procurement gains stemming from decelerating inflation.
Operating expenses were $1,010 million compared with $1,002 million reported in the year-ago quarter. Excluding business transformation costs, operating expenses came in at 12.8% of net sales, in line with the year-ago period.
Adjusted EBITDA came in at $128 million, down from the $181 million reported in the year-ago quarter.
Other Updates
This Zacks Rank #3 (Hold) company ended the quarter with total liquidity of nearly $1.43 billion, including cash of nearly $34 million and a borrowing capacity of about $1.40 billion under the company’s asset-backed lending facility. Total outstanding debt (net of cash) was $2.16 billion, down $124 million on a sequential basis.
During the second quarter, United Natural’s free cash flow amounted to $116 million, with net cash provided by operating activities being $183 million.
Fiscal 2024 Guidance
For fiscal 2024, the company anticipates net sales in the range of $30.5-$31.0 billion compared with the prior view of $30.9-$31.5 billion.
Adjusted EBITDA is now expected in the $475-$525 million range compared with the $450-$550 million range forecasted earlier.
UNFI now expects to deliver a net loss of $101-$65 million in fiscal 2024 compared with a net loss of $120-$46 million expected earlier.
United Natural now envisions the fiscal 2024 bottom line between a loss of 56 cents and earnings of 6 cents. Management had earlier guided the bottom line between a loss of 88 cents per share and earnings of 38 cents.
The company still projects capital expenditures of nearly $400 million for fiscal 2024.
UNFI’s stock has tumbled 22.9% in the past three months against the industry’s growth of 3.2%.
3 Appetizing Picks
Post Holdings (POST - Free Report) , a consumer-packaged goods holding company, currently sports a Zacks Rank #1 (Strong Buy). POST has a trailing four-quarter earnings surprise of 52.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings indicates growth of 15.2% and 3.4%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29% from the year-ago reported figure.
Celsius Holdings (CELH - Free Report) , a functional energy drink and liquid supplement company, currently carries a Zacks Rank #2. CELH has a trailing four-quarter earnings surprise of 67.4%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal year sales and earnings suggests growth of 41.6% and 37.8%, respectively, from the year-ago period numbers.