Despite low inflation and a slowdown in same-store sales for some of its key retail customers, United Natural Foods Inc. delivered better-than-expected results for its fourth quarter of 2016 ended July 30.
The investments that the distributor has made over the last three years to capture fast-growing fresh and good-for-you proteins, specialty cheeses, deli and produce is paying off, President and CEO Steve Spinner told investors during an earnings call Monday. UNFI reported quarterly revenue of $2.21 billion—a 7.4 percent improvement over the fourth quarter of last year, and full year 2016 revenue of $8.47 billion. Annual net income, gross margin and earnings per share, however, were down from last year.
Its fresh business now represents 15 percent of total UNFI sales, Spinner said, thanks in part to a group of smaller distributors it acquired in 2016: Global Organic/Specialty Source, Haddon House and Nor-Cal Produce. “With these acquisitions, we have added more than $700,000 in revenue and roughly 1,000 associates and can now offer our customers more than 100,000 different products.”
UNFI also restructured its sales force based on three geographic regions.
In the fourth quarter:
- Sales in the super-natural channel were up 4 percent over prior year and represented one-third of total UNFI sales.
- Supermarket sales increased 4.4 percent, including the impact of recent acquisitions and termination of a key customer contract, and made up 28.2 percent of total sales.
- Sales in the independent channel grew at 11.7 percent over fourth-quarter last year, including the impact of recent acquisitions, and represented 27.8 percent of UNFI sales.
- Foodservice net sales were up 13 percent.
- Ecommerce sales grew 23.8 percent over prior year.
Through 2017, Spinner said UNFI will continue its building-out-the-store initiatives and looking for “selective and opportunistic M&A.”