United Natural Foods Q1 Profit Up 19%, Results Beat View; Reiterates Outlook

(RTTNews) - United Natural Foods Inc. (UNFI) on Thursday reported a 19 percent increase in profit for the first quarter from last year as double-digit revenue growth more than offset lower margins.

Both earnings per share and quarterly sales beat analysts' estimates. Looking ahead, the specialty foods distributor reaffirmed its financial outlook for fiscal 2015.

Steven Spinner, President and Chief Executive Officer of United Natural Foods said, "UNFI achieved record sales of almost $2 billion during our first quarter of fiscal 2015 and comparable sales growth recovered nicely after experiencing a modest slowdown during the first few weeks of the quarter."

United Natural, based in Providence, Richmond, posted net income for the first quarter of $33.04 million or $0.66 per share, up from $27.76 million or $0.56 per share in the year-ago period.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter rose 24 percent to $1.99 billion from $1.60 billion in the prior year, topping analysts' consensus revenue estimate of $1.96 billion.

The quarter included incremental sales of about $227.7 million resulting from the company's acquisition of Tony's Fine Foods and Trudeau Foods.

However, gross margin for the quarter declined 92 basis points from last year to 16.0 percent.

Gross margin was negatively impacted by the dilution from Tony's sales in the quarter. Shifting customer mix, inbound freight costs and foreign exchange from the declining value of the Canadian dollar on the company's Canadian business also contributed to the year-over-year decline.

Operating margin for the quarter declined 7 basis points from last year to 2.9 percent.

Looking ahead to fiscal 2015, United Natural Foods reaffirmed its outlook for reported earnings of $2.88 to $3.01 per share on net sales of about $8.13 billion to $8.38 billion. Analysts currently expect earnings of $2.94 per share on revenues of $8.28 billion for the year.

UNFI closed Wednesday's trading at $76.09, up $0.32 or 0.42 percent on a volume of 387,682 shares.