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For the first quarter of fiscal 2014 ended Nov. 2, United Natural Foods Inc. (UNFI) posted a net sales increase of 13.6 percent, or $192 million, to $1.6 billion versus $1.4 billion in the year-ago period. Diluted EPS was 56 cents for the first quarter of fiscal 2014, a 30.2 percent rise from 43 cents last year. When adjusting the prior-year diluted EPS for certain items, diluted EPS grew 21.7 percent, from 46 cents for the year-ago period, according to UNFI.
“Continued demand and UNFI’s focus on its core strategies delivered strong results during the first quarter of fiscal 2014,” noted Steven Spinner, president and CEO of the Providence, R.I.-based wholesaler.
Gross margin for the company was 16.9 percent for fiscal 2014’s first quarter, a 20-basis-point increase from gross margin of 16.7 percent last year. Compared with fiscal 2013’s fourth quarter, gross margin declined 39 basis points, mainly because of the ongoing shift in customer mix to the conventional supermarket and supernatural channels, UNFI said.
UNFI’s total operating expenses were 13.9 percent as a percentage of net sales for the first quarter of fiscal 2014, a decrease of 21 basis points versus last year. Total operating expenses grew $23.8 million, or 11.9 percent, to $223.2 million in the first quarter of fiscal 2014, as compared with $199.4 million in the year-ago period, which the company primarily attributed to higher sales volume.
Mind the GAAP
On a GAAP (generally accepted accounting principles) basis, UNFI’s operating income rose 31.3 percent, or $11.5 million, to $48 million for the first quarter of fiscal 2014, versus $36.6 million last year. Operating income as a percentage of net sales for the first quarter of fiscal 2014 grew 41 basis points to 3 percent, compared with the year-ago period. Operating income as a percentage of net sales increased 29 basis points from adjusted operating income as a percentage of net sales of 2.7 percent last year.
GAAP net income at UNFI for the first quarter of fiscal 2014 increased $6.2 million, or 28.9 percent, to $27.8 million, or $0.56 per diluted share, from $21.5 million, or $0.43 per diluted share, for the first quarter of fiscal 2013.
“As we grow into new facilities, channels and geographies, UNFI is well positioned to continue its growth,” said Spinner.
Based on the company’s performance to date and the current outlook for the remainder of fiscal 2014, UNFI affirmed its September guidance for fiscal 2014. For fiscal 2014, ending Aug. 2, 2014, a 52-week fiscal year versus the 53-week fiscal 2013, the company anticipates net sales in the range of about $6.65 billion to $6.78 billion, an increase of around 9.7 percent to 11.8 percent over fiscal 2013. Adjusting for the 53rd week in fiscal 2013, UNFI expects sales growth for fiscal 2014 in the range of about 11.8 percent to 14 percent. The company estimates GAAP earnings per diluted share for fiscal 2014 in the range of about $2.40 to $2.50 per share, a rise of about 10.1 percent to 14.7 percent over last year.
UNFI carries and distributes more than 65,000 products to more than 31,000 customer locations across the United States and Canada.