Foodservice

United Natural Foods Q1 2021 sales, earnings miss market expectations

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December 9, 2020

United Natural Foods reported that sales for the first quarter of fiscal 2021 rose 6% from $6.3 billion in the 2021 first quarter to $6.67 billion, however, the company suffered a net loss of $1 million including $43 million in pre-tax charges and costs, according to an earnings release.

The $1 million net loss for the quarter ending Oct. 31, 2020 marked a nearly 100% growth over the 2020 fiscal first quarter loss of $284 million

Adjusted earnings before taxes rose 30.6% to $159 million. Loss per diluted share was 2 cents, while adjusted earnings per share rose from 47 cents to 51 cents. Loss per diluted share was $7.21 in 2020's first quarter while adjusted EPS was 4 cents.

The company's revenue gain missed market expectations by $100 million and earnings per share missed by 23 cents on a non-GAAP basis and by 69 cents on a GAAP basis, according to Seeking Alpha.

Shares traded at $15.80 today against a 52-week range of $5.43-$22.61.

"I am pleased with the start to fiscal 2021 as UNFI leveraged strong sales growth into year-over-year expanded adjusted EBITDA margins for the third consecutive quarter," Steven Spinner, chairman and CEO, said in the release. "We've done a great job protecting the safety of our associates and helping our customers succeed in an evolving operating environment while building for the future through new distribution centers, customer solutions and innovation across our business. Our newest distribution center will be a campus in Allentown, Pennsylvania to service Key Food beginning next fall and facilitate further growth in the greater New York metropolitan market."

Net sales from continuing operations benefited from strong customer demand from existing and new retailers, including the continued benefits of cross selling. The increase in retail sales included the benefit of an approximately 200% increase in e-commerce sales at Cub Foods.

The company is reaffirming its full-year outlook for net sales, adjusted EPS, and adjusted EBITDA and updating its outlook for net income, EPS, and capital expenditures. This outlook assumes food-at-home consumption remains elevated and exceeds food consumed away from home for the rest of fiscal 2021.

Compared to fiscal 2020, the sales growth of nearly $900 million will be more pronounced in the first half of fiscal 2021 prior to cycling the pandemic-related increase in customer demand that began in the third quarter of fiscal 2020.