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United Natural Foods IncUNFI reported a second-quarter FY23 sales increase of 5.4% year-on-year to $7.82 billion, beating the consensus of $7.77 billion. The company attributed the sales growth to inflation and new business.
Gross margin for the quarter was 13.7% versus 14.5% last year. The gross profit fell 0.6% to $1.1 billion.
Operating margin was 0.8%, and operating income for the quarter declined 49.6% to $63 million.
Adjusted EBITDA of $181 million decreased 17.7% Y/Y. Adjusted EPS of $0.78 missed the analyst consensus estimate of $1.46.
The company held $40 million in cash and equivalents as of Jan. 28, 2023.
“Profits were challenged as we did not repeat the significant level of procurement gains from rapidly accelerating inflation and inventory gains, due to supply chain volatility, that we experienced in the second quarter of last year,” said CEO Sandy Douglas.
Outlook: United Natural Foods raised its FY23 sales outlook from $29.8 billion-$30.4 billion to $30.1 billion-$30.5 billion, against the consensus of $30.22 billion.
UNFI cut its FY23 adjusted EPS forecast from $4.85-$5.15 to $3.05-$3.90 versus the consensus of $5.00.
The company has withdrawn its long-term fiscal year 2024 financial targets citing challenges ahead.
Price Action: UNFI shares are trading lower by 27.98% at $29.50 in premarket on the last check Wednesday.
