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CEO Steven Spinner reports a restructuring of the business into regional territories and a new acquisition.
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United Natural Foods Inc. (Nasdaq: UNFI) committed to growth across retail channels and categories as it announced a new acquisition and reported second-quarter financial results.
UNFI has purchased Global Organic/Specialty Source of Sarasota, Florida—a distributor of organic fruits, vegetables, juices, milk, eggs, nuts and coffee. Watch for more acquisitions like this one, UNFI President and CEO Steven Spinner said.
“We are intently focused on managing our business in a rapidly changing environment. We will make strategic investments to improve our sales growth rate and customer experience through the back half of this fiscal year and into fiscal 2017,” Spinner said in a press release. “We are working to build new distribution opportunities and expand our relationships with current customers. Our announcement today of the acquisition of certain assets of Global Organic further demonstrates our strategic focus on increasing UNFI’s product offering into the perishable perimeter. We believe our infrastructure, supply chain and logistics network are uniquely positioned to add meaningful value to customers in an evolving food retail environment.”
Spinner also announced that a restructuring into regional territories and technology investments “to grow a greater share of store” will accompany acquisitions as part of its 2016 strategy.
And while UNFI has outpaced industry growth averages for the last several years, it does not expect to do the same this year. Spinner said the industry forecast for 2016 is 7 percent to 9 percent growth. UNFI expects 1.5 percent to 3 percent growth for the fiscal year ending July 30 over 2015, according to its revised guidance released Feb. 29.
Second-quarter highlights include:
Net sales increased 1.5 percent to $2.05 billion, compared to $2.02 billion for the same period last fiscal year.
Adjusted net sales increased 6.5 percent compared to the same period last fiscal year, excluding the year-over-year impact of the previously disclosed termination of a customer distribution contract and, for the second quarter of fiscal 2015, the previously disclosed non-recurring reduction in net sales.
Diluted EPS was 45 cents compared to 55 cents for the same period last fiscal year.
Adjusted diluted EPS was 49 cents, excluding $2.0 million of severance and other transition costs related to a previously announced restructuring plan and approximately $1.0 million of acquisition related costs.
Free cash flow generation of $106.2 million, the largest free cash flow quarter in company history.
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