United Natural Foods Inc.
(
UNFI
) delivered better-than-expected second quarter 2012 earnings of 45
cents per share, exceeding the Zacks Consensus Estimate by a penny.
The earnings also surpassed the prior-year earnings by 6 cents.
Sales and Margins Details
Net sales for the quarter increased 15.5% year over year to
$1.29 billion, exceeding the Zacks Consensus Estimate of $1.26
billion. Higher consumer demand for food and the addition of a new
national customer credited the strong sales growth.
Gross margin plummeted 48 basis points to 17.3% from the
year-ago period, which was primarily the result of continued shift
in customer mix to the supermarket channel and higher inventory
levels.
However, operating margin climbed 6 basis points to 2.9% in the
reported quarter, on the back of productivity initiatives taken up
by the company and reduced operating costs.
Guidance
Based on the second-quarter earnings and the current
environment, United Natural expects an increase of about 12.8% to
14.1% in the total sales for fiscal 2012 to reach in the range of
$5.1 billion to $5.2 billion. The sales guidance increased from the
previous target of $5.0 billion to $5.1 billion.
In addition, the company expects its fiscal 2012 reported
earnings guidance to shrink to a range of $1.79 - $1.86, compared
with the guidance range of $1.75 - $1.87 per share provided
previously. The guidance includes approximately $6.5 - $7.0 million
operating expenses for fiscal 2012 related to the previously
announced divestiture of conventional non-foods and general
merchandise lines of business and the start-up expenses associated
with the new national customer.
Excluding these expenses, United Natural expects its fiscal 2012
operating earnings to come in the range of approximately $1.88 -
$1.94 per share, reflecting an increase of approximately 11.9% to
15.5% over fiscal 2011 operating earnings of $1.68 per share.
United Natural carries and distributes more than 60,000 products
to more than 23,000 customer locations throughout the United States
and Canada. The company also serves a wide variety of retail
formats including conventional supermarket chains, natural product
superstores, independent retail operators and the food service
channel.
The company, which competes with
Nash Finch Co.
(
NAFC
), currently holds a Zacks #2 Rank that translates into a 'Buy'
Rating. On a long-term basis, we provide a Neutral recommendation
on the stock.
NASH FINCH CO (
NAFC
): Free Stock Analysis Report
UTD NATURAL FDS (
UNFI
): Free Stock Analysis Report
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