UNFI Sees Q3 Profits Jump, Supermarket Biz Up 23 Percent
DAYVILLE, Conn. -- United Natural Foods, Inc. (UNFI), based here, this week posted net income of $13.7 million, or 32 cents per share, for the third quarter ended April 28, 2007, an 11.4 percent rise over the $12.3 million, or 29 cents per share, reported last year.
The wholesaler's revenues for the quarter came to $732.5 million, an increase of $95.4 million, or 15.0 percent, from the $637.1 million posted in the year-ago period. Both the supernatural and supermarket channels of the wholesale segment showed comparable growth rates upwards of 20 percent, UNFI said.
"Our sales growth during the third quarter improved as we had expected, driven by solid growth of over 23 percent in our supermarket channel," said UNFI president and c.e.o. Michael Funk in a statement. "Also, growth in the supernatural channel exceeded 20 percent for the quarter, due to continued strong consumer demand for natural and organic products, aided by new store openings and our increased market share in the West."
Gross margin as a percent of sales for the third quarter declined 1.2 percent, to 17.7 percent, however, due to such factors as the company's level of forward buying in the Western region during the quarter continuing to run below historical levels, an unusually high amoung of inventory write-offs in broadline distribution, and a number of new customer agreements in place during the quarter vs. last year.
Additionally, unanticipated delays in the completion of a previously announced strategy to acquire emerging brands and launch new products prevented UNFI's United Natural Brands division from contributing the expected level of sales and incremental gross margin.
Funk noted that with the above issues resolved, he expected the gross margin to grow over the next two quarters.
UNFI carries and distributes over 40,000 products to more than 18,000 customers nationwide, serving a wide variety of retail formats, among them conventional supermarket chains, natural product superstores, independent retail operators, and the foodservice channel.
The wholesaler's revenues for the quarter came to $732.5 million, an increase of $95.4 million, or 15.0 percent, from the $637.1 million posted in the year-ago period. Both the supernatural and supermarket channels of the wholesale segment showed comparable growth rates upwards of 20 percent, UNFI said.
"Our sales growth during the third quarter improved as we had expected, driven by solid growth of over 23 percent in our supermarket channel," said UNFI president and c.e.o. Michael Funk in a statement. "Also, growth in the supernatural channel exceeded 20 percent for the quarter, due to continued strong consumer demand for natural and organic products, aided by new store openings and our increased market share in the West."
Gross margin as a percent of sales for the third quarter declined 1.2 percent, to 17.7 percent, however, due to such factors as the company's level of forward buying in the Western region during the quarter continuing to run below historical levels, an unusually high amoung of inventory write-offs in broadline distribution, and a number of new customer agreements in place during the quarter vs. last year.
Additionally, unanticipated delays in the completion of a previously announced strategy to acquire emerging brands and launch new products prevented UNFI's United Natural Brands division from contributing the expected level of sales and incremental gross margin.
Funk noted that with the above issues resolved, he expected the gross margin to grow over the next two quarters.
UNFI carries and distributes over 40,000 products to more than 18,000 customers nationwide, serving a wide variety of retail formats, among them conventional supermarket chains, natural product superstores, independent retail operators, and the foodservice channel.