United Natural Foods (UNFI 39.91, -0.97) is down 2.4% as disappointing revenue and cautious revenue guidance overshadow a modest bottom-line beat.
The distributor of natural, organic, and specialty foods reported above-consensus third quarter earnings of $0.77 per share on an 11.1% year-over-year jump in revenue to $2.37 billion, which was shy of expectations.
While the company recorded a solid increase in sales, the growth rate was weaker than expected due to broad based food retail softness. Conversely, acquisitions of Haddon House Food Products, Global Organic/Specialty Source, Nor-Cal Produce, and Gourmet Guru, provided a positive benefit to sales growth.
Gross margin improved to 15.46% from 15.12% one year ago. Acquisitions and margin improvement initiatives were responsible for the improvement.
The company announced it will incur additional charges between $3.00 million and $4.00 million associated with previously-announced restructuring. The charges will be incurred in the fourth fiscal quarter.
When excluding the impact of restructuring expenses incurred in the third quarter, adjusted operating income rose 2.9% year-over-year to $68.90 million.
Looking ahead, the company reaffirmed its bottom-line guidance for the full year, expecting earnings between $2.53 per share and $2.58 per share. However, revenue guidance was lowered and the company now expects below-consensus sales between $9.29 billion and $9.34 billion after previous guidance called for sales between $9.38 billion and $9.46 billion.