United Natural Foods Faces Loss and Disappointing Guidance


Shares of United Natural Foods (UNFI) took a nosedive on Tuesday as the company reported a loss in its fourth fiscal quarter and issued disappointing guidance for the future. United Natural Foods is a leading distributor of organic and natural foods, supplying grocers including Amazon.com’s Whole Foods Market.

In the fiscal fourth quarter, the company recorded an adjusted loss of 25 cents per share. While this marked a significant decline from the earnings of $1.27 per share in the year-ago quarter, it was narrower than the 39-cent loss projected by analysts. The decrease in profitability was primarily attributed to a reduction in inflation-driven procurement gains and increased shrinkage.

CEO Sandy Douglas acknowledged the challenges faced by the company, stating, “While we experienced growth across all customer channels, our profitability was impacted by a decline in procurement gains and elevated shrink. We anticipate further difficulties as we navigate through the first half of fiscal 2024 and cycle through elevated inflationary benefits.”

For fiscal 2024, United Natural Foods provided a disappointing outlook, expecting adjusted earnings to range between a loss of 88 cents per share and earnings of 38 cents per share. This projection fell far below Wall Street’s expectations of $1.94 per share. The outlook reflects lower expected levels of procurement gains due to moderating inflation levels, as well as the restoration of performance-based incentive cash compensation.

As a result of this disappointing news, United Natural Foods stock experienced a significant drop of 13% in premarket trading on Tuesday. Year-to-date, shares are down by 51%.

In conclusion, United Natural Foods is facing challenges with its declining profitability and reduced earnings outlook for fiscal 2024. The company will need to navigate through these headwinds while focusing on strategies to improve its financial performance moving forward.

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