United Natural Foods, Inc.
) is set to report fiscal second-quarter 2013 results before the
opening bell on Feb 26. Last quarter, this specialty food
distributor posted in-line results. Let's see how things are
shaping up prior to the announcement.
Growth Factors This Past Quarter
United Natural's productivity initiatives, improved
operational efficiency, acquisitions and continuous increase in
demand for organic and natural food products drove the earnings
in the first quarter.
The company posted double-digit revenue growth driven by
rising demand for organic and natural foods. Also, its decision
to divest the company's non-foods and general merchandise lines
has allowed it to concentrate on its core business of the
distribution of natural, organic and specialty foods. However,
United Natural remains severely impacted by the continued shift
in the company's customer mix which led to the gross margin
decline in the quarter.
The Zacks Consensus Estimate stands at 50 cents for the second
quarter. The company is gaining momentum with growing demand for
organic and natural food products. Going ahead, United Natural
looks for further opportunities to enhance its position within
the natural and organic industry in the U.S. and Canada and to
increase its market share in the specialty products industry.
Moreover, United Natural's strategic plan including the
rollout of a national warehouse management and procurement system
upgrade is expected to reduce operating expenses to offset lower
gross margins in the upcoming quarters.
United Natural carries a Zacks Rank #3 (Hold). Our model
states that a stock needs to have both a positive Earnings ESP
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, #2 or #3 to beat earnings estimates. In
addition, we caution investors against stocks with Zacks Ranks #4
and #5 (Sell-rated stocks) going into the earnings announcement,
especially when the company is seeing negative estimate revisions
Other Stock to Consider
Here are some other retail/wholesale stocks, which have the
right ingredients to post an earnings beat this quarter, as per
Abercrombie & Fitch Co.
), Earnings ESP of +2.59% and Zacks Rank #2 (Buy)
New York & Co
), Earnings ESP of +12.50% and Zacks Rank #2 (Buy)
), Earnings ESP of +1.27% and Zacks Rank #3 (Hold)
ABERCROMBIE (ANF): Free Stock Analysis Report
NEW YORK & CO (NWY): Free Stock Analysis
PRICESMART INC (PSMT): Free Stock Analysis
UTD NATURAL FDS (UNFI): Free Stock Analysis
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