UNFI Posts Solid Q4
United Natural Foods, Inc. (UNFI) yesterday posted net sales of $988.5 million for the fourth quarter of fiscal 2010 ended July 31, 2010, a rise of about $135.0 million, or 15.8 percent, from the $853.5 million logged in the year-ago period. Excluding net sales of $22.1 million in assets related to the June acquisition of Canadian food distribution business SunOpta Distribution Group, which is now operating as UNFI Canada, net sales grew 13.2 percent to $966.4 million in the fourth quarter vs. last year.
"During the fourth quarter, our sales growth continued to accelerate as our business continued to experience strong growth,” noted president and CEO Steven Spinner. “We also began servicing our previously announced business wins, and closed on our acquisition of UNFI Canada. As we begin fiscal 2011, we expect to maintain our current trends while continuing to work on business integration and infrastructure enhancements.”
Net income for the quarter was $17.6 million, or 40 cents per diluted share, for the fourth quarter of fiscal 2010, compared with $15.5 million, or 36 cents per diluted share, in the fourth quarter of fiscal 2009.
Gross margin was 18.5 percent for the fourth quarter, a 44 basis-point drop from 19.0 percent for the year-ago period, mainly because of the continued shift in growth in UNFI's customer mix, and moderated inflation, the company said. Gross margin increased four basis points from that of the third quarter of fiscal 2010, ended May 1, 2010, of 18.5 percent.
Operating expenses as a percentage of net sales rose 25 basis points to 15.9 percent of net sales, or $157.1 million in the fourth quarter, compared with 15.6 percent or $133.5 million in last year. UNFI logged $4.9 million in expenses during the quarter in connection with the closing of one of its retail stores in Florida; professional fees related to the UNFI Canada acquisition; startup costs associated with a new distribution facility in Lancaster, Texas; and increases in workers’ compensation costs.
Net sales for fiscal 2010 came to $3.76 billion, an 8.7 percent rise over the prior fiscal year. For the full fiscal year, the supernatural channel saw year-over-year growth of 15.2 percent, the supermarket channel grew 11.7 percent, and the independent channel experienced 4.2 percent growth.
In addition to its acquisition of UNFI Canada, during fiscal 2010, the company revealed extended its distribution agreement with Whole Foods Market Distribution Inc. by seven years, and agreed to take over the primary distribution for that distributor in its Rocky Mountain and Southwest regions, as well as to acquire certain of its assets in connection with the deal.
Providence, R.I.-based UNFI carries and distributes more than 60,000 products to over 23,000 retail locations in United States and Canada. The company serves conventional supermarket chains, natural product superstores, independent retail operators and the foodservice channel, among others.