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Earnings Preview: United Natural

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Organic food maker, United Natural Foods, Inc (UNFI - Free Report) is all set to report its first quarter fiscal 2013 results on November 30, 2012. The Zacks Consensus Estimate for the first quarter is 46 cents (estimated year-over-year improvement of 14.6%) on revenues of $1.39 billion (estimated year-over-year increase of 14.4%).

Fourth Quarter 2012 Recap

United Natural delivered fourth quarter fiscal 2012 earnings of 51 cents per share, in line with the Zacks Consensus Estimate. Reported earnings jumped 18.6% from the year-ago quarter, driven by improved operational efficiency.

Net sales for the quarter increased 16.0% year over year to $1.34 billion compared with $1.2 billion in the prior-year quarter. Net sales came in marginally ahead of the Zacks Consensus Estimate of $1.31 billion. The results were driven by continuous increase in demand for the company’s organic and natural food products.

Agreement of Estimate Revisions

Over the past 30 days, 1 estimate has moved in the upward direction for both the first quarter and for fiscal 2013. There were 14 and 17 estimates available for first quarter and for fiscal year, respectively. None of the estimates have been revised downwards over that time frame. There have been no estimate revisions over the past 7 days.

Most of the estimates were revised after the announcement of fourth quarter results and fiscal 2013 outlook in September this year. The company has not announced any major news since then, which explains the stalemate in estimate revisions.

Magnitude of Estimate Revisions

Given the limited estimate revisions, the consensus estimate for the first quarter has remained static over the last 7 as well as 30 days at 46 cents. The consensus estimate for the fiscal year has also remained static at $2.22 over the last 7 as well 30 days.

Surprise History

United Natural has outpaced earnings estimates in two of the past four quarters, while meeting the same in the other two. On average, the earnings surprise is a positive 3.82% over the same timeframe.

Our Recommendation

We currently have a Neutral recommendation on United Natural. The stock carries a Zacks #3 Rank (a short-term ‘Hold’ rating). A peer company, Sysco Corporation (SYY - Free Report) also carries a Zacks #3 Rank.

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