Foodservice

United Natural Foods lifts Q2 2023 sales boosted by inflation, suffers earnings decline

Image: Adobe Stock.

March 8, 2023

United Natural Foods Inc. lifted its Q2 2023 sales boosted by inflation but suffered an earnings decline, according to an earnings report. Highlights include:

• Net sales increased 5.4%, from $7.416 billion in Q2 2022 to $7.816 billion in the quarter ending Jan. 28, 2023, primarily driven by inflation and new business. This new business resulted from selling new or expanded categories to existing customers and adding new customers. These increases were partially offset by a decrease in units sold.
• Net income fell from $66 million to $19 million in the comparative quarters.
• Net EPS on a diluted basis fell from $1.08 to 31 cents while EPS on a basic basis fell from $1.13 to 32 cents in the comparative quarters.
• Adjusted EPS fell from $1.36 to 78 cents in the comparative quarters.

Shares traded at $29.99 today against a 52-week range of $26.80-$9.56.

The 78 cents adjusted EPS missed Zack's Consensus Estimate of $1.38, according to Zacks.

"Our second quarter sales grew over 5% compared to the prior year as more customers bought more categories, private brands and professional services driving sales to over $7.8 billion," CEO Sandy Douglas said in the press release. "While I'm pleased with our continued sales growth, profitability in the quarter was lower than recent levels and our plan. Profits were challenged as we did not repeat the significant level of procurement gains from rapidly accelerating inflation and inventory gains, due to supply chain volatility, that we experienced in the second quarter of last year. As a result of these challenges, we are reducing our profitability expectations for fiscal 2023 and withdrawing our fiscal 2024 targets."

The company updated its full year outlook for net sales from $29.8-$30.4 billion to $30.1-$30.5 billion and its adjusted EPS from $4.85-$5.15 to $3.05-$3.90.