UNFI Q3 sales hit $1.39 billion, up 15 percent

UNFI Q3 sales hit $1.39 billion, up 15 percent

CEO says results demonstrate UNFI's commitment to growing at a rate that exceeds the industry while delivering exemplary customer service to retailers.

United Natural Foods, Inc. reported net sales for the third quarter of fiscal 2012 ended April 28, 2012 of $1.39 billion, a $184.0 million, or 15.3 percent, increase compared with net sales of $1.20 billion recorded in the third quarter of fiscal 2011.

"Continued demand for UNFI's products and services drove our 15.3 percent net sales growth during the fiscal third quarter," said Steven Spinner, UNFI's President and Chief Executive Officer. "Our results demonstrate UNFI's continued commitment to growing at a rate that exceeds the industry while delivering exemplary customer service to the organic and specialty foods retailer."

Gross margin was 17.6 percent for the third quarter of fiscal 2012, representing a 53 basis point decline from gross margin of 18.2 percent for the prior year comparable period. Gross margin for the third quarter of fiscal 2012 was impacted primarily by the continued shift in customer mix to the conventional supermarket channel.

Total operating expenses as a percentage of net sales were 14.1 percent for the third quarter of fiscal 2012, a decrease of 81 basis points compared with the third quarter of fiscal 2011. This improvement was driven by UNFI's ongoing initiatives to enhance productivity throughout the organization and reduce operating expenses as a percentage of net sales. Total operating expenses increased by $16.3 million, or 9.0 percent, to $195.9 million compared with the third quarter of fiscal 2011, which had operating expenses of $179.6 million.

Operating income as a percentage of net sales increased 27 basis points to 3.5 percent for the third quarter of fiscal 2012 compared with the third quarter of fiscal 2011. Net income for the third quarter of fiscal 2012 increased by $5.7 million, or 24.3 percent, to $29.0 million or $0.59 per diluted share, from $23.4 million, or $0.48 per diluted share, for the third quarter of fiscal 2011.

"Our associates' continued efforts towards productivity improvements combined with our strong sales volume contributed to our operating margin expansion in the quarter," added Mr. Spinner. "We believe our year to date results have left us in a solid position to achieve our operating result targets for fiscal 2012, which supports our revised fiscal 2012 guidance."

Fiscal 2012 year to date summary
Net sales for the nine months ended April 28, 2012 totaled $3.89 billion, a 15.5 percent increase over the comparable prior fiscal year period. Gross margin was 49 basis points less than the comparable prior year period, at 17.6 percent of net sales for the nine months ended April 28, 2012.

At 14.7 percent of net sales, total operating expenses for the nine months ended April 28, 2012 were 39 basis points lower than the comparable prior year period. Operating expenses for the nine months ended April 28, 2012 include approximately $6.9 million of expenses related to the previously announced restructuring and divestiture of the Company's conventional non-foods and general merchandise lines of business and onboarding expenses related to the Company's newest national customer. Excluding these expenses, operating expenses as a percentage of net sales were 14.5 percent for the nine months ended April 28, 2012, a decrease of 57 basis points compared with the first nine months of fiscal 2011.

Operating income as a percentage of net sales was 2.9 percent for the nine months ended April 28, 2012, compared to 3.0 percent for the same period in fiscal 2011. Excluding the approximately $6.9 million of restructuring and onboarding expenses noted above, operating income as a percentage of net sales was 3.1 percent for the first nine months of fiscal 2012, an increase of 8 basis points compared with the same period in fiscal 2011.

Diluted earnings per share for the nine months ended April 28, 2012 was $1.35, an 8.0 percent increase from diluted earnings per share during the first nine months of fiscal 2011. Excluding the restructuring and onboarding expenses noted above, diluted earnings per share was $1.44 for the nine months ended April 28, 2012, a 15.2 percent increase over the nine months ended April 30, 2011. In addition, diluted earnings per share was affected by an increase in the weighted average diluted common shares outstanding to 49.0 million for the nine months ended April 28, 2012, from 47.5 million for the same period in fiscal 2011, resulting from the Company's public offering of 4,427,500 shares of its common stock completed late in the first quarter of fiscal 2011.

 

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