Foodservice

United Natural Foods Q4 earnings beat projections

September 29, 2020

United Natural Foods' non-GAAP earnings per share of $1.06 beat expectations by 34 cents for the fourth quarter ending Aug. 1, 2020, according to Seeking Alpha, while GAAP EPS of 88 cents beat expectations by 20 cents for the natural foods wholesaler.

The company shares were trading at $16.75 this morning against a $22.38 high for the last 52-week period.

United Natural Foods' net sales were $6.75 billion for the fourth quarter, a 0.4% gain compared to $6.26 billion last year when excluding the additional week in fiscal 2019, which accounted for $475 million in net sales last year, according to a company earnings report.

The increase in net sales on a 13-week comparable basis was driven by strong customer demand as well as the benefits from cross selling.

Net income for the fourth quarter of fiscal 2020 was $52.4 million, a 173.7% gain compared to $19.2 million for the fourth quarter of fiscal 2019.

Net income per diluted share was 89 cents for the fourth quarter of fiscal 2020, compared to 36 cents for the fourth quarter of fiscal 2019. Adjusted EPS was $1.06 for the fourth quarter of fiscal 2020, compared to adjusted EPS of 35 cents in the fourth quarter of fiscal 2019.

Adjusted EBITDA for the fourth quarter of fiscal 2020 was $197.9 million, compared to $165.9 million for the fourth quarter of fiscal 2019.

"Fiscal 2020 was a monumental year for UNFI as the demonstrated flexibility and strength of our supply chain network led to full year results that exceeded our expectations," Steven L. Spinner, chairman and chief executive officer, said in a press release. "At the same time, we're focused on keeping our associates safe and maintaining the food supply chain for communities across North America through the unprecedented events of 2020, including the pandemic, civil unrest and natural disasters. We're continuing to execute with passion and purpose on our strategy and expect further growth in fiscal 2021."

Operating income in the fourth quarter of fiscal 2020 was $79.0 million and included $20.6 million of restructuring, acquisition and integration related expenses and $16.3 million of loss on sale of assets. When excluding these items, operating income was $116 million, or 1.72% of net sales, in the fourth quarter of fiscal 2020.

Operating income in the fourth quarter of fiscal 2019 was $95.7 million and included a benefit from a goodwill and asset impairment adjustment of $39.8 million and a gain on sale of assets, partially offset by restructuring, acquisition, and integration related expenses of $19.4 million. When excluding these items, operating income for the fourth quarter of fiscal 2019 was $74.7 million, or 1.11% of net sales.

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 the third quarter of fiscal 2020, according to the press release.

This outlook assumes that food-at-home consumption remains elevated and exceeds food consumed away from home for the rest of fiscal 2021.