|United Natural Foods, Inc. Announces Third Quarter Fiscal 2011 Results|
PROVIDENCE, R.I., June 2, 2011 /PRNewswire via COMTEX/ --
United Natural Foods, Inc. (Nasdaq: UNFI) today reported that net income for the third quarter of fiscal 2011 ended April 30, 2011 increased by $3.9 million, or 19.9%, to $23.4 million, from $19.5 million for the comparable quarter in fiscal 2010. Earnings per diluted share for the third quarter of fiscal 2011 was $0.48, including the dilutive effect from our equity offering completed in the first quarter of fiscal 2011, which represents an increase of 6.9% from $0.45 per diluted share for the third quarter of fiscal 2010. Net sales for the third quarter of fiscal 2011 totaled $1.20 billion, an increase of 22.1%, or $218.3 million, over net sales of $985.7 million recorded in the third quarter of fiscal 2010. Excluding the impact of sales related to the Company's June 2010 Canadian acquisition and its October 2010 acquisition of certain inventory and distribution assets of Whole Foods Market, Inc., which generated combined estimated incremental net sales of approximately $95.9 million during the third quarter, third quarter fiscal 2011 net sales increased by 12.4%, or $122.4 million, to $1.11 billion.
"During the quarter we continued to see strong demand for UNFI's products across our customer channels and delivered strong earnings growth despite tough comparisons versus the prior year and increasing fuel costs," commented Steven Spinner, President and Chief Executive Officer. "In particular, the Independent channel had sales growth of 14.0%, reflecting our continued commitment to our largest group of customers. Excluding our acquisitions, the Independent channel increased by 8.0%."
Gross margin was 18.2% for the third quarter of fiscal 2011, which represents a 33 basis point improvement from the gross margin of 17.8% for the second quarter of fiscal 2011. The higher gross margin compared to the prior sequential quarter was due to higher fuel surcharges, lower inventory adjustments and the non-recurrence of the higher inbound freight expenses that we experienced in the second fiscal quarter of 2011 as we expedited deliveries to maintain service levels. The decrease of 36 basis points from the gross margin of 18.5% for the third quarter of fiscal 2010 is primarily the result of the continued shift in the Company's customer mix.
Operating expenses as a percentage of net sales decreased to 14.9% for the fiscal 2011 third quarter, a decrease of approximately 15 basis points compared to the fiscal 2010 third quarter. Operating income as a percentage of net sales decreased to 3.2% for the third quarter of fiscal 2011 from 3.4% for the comparable prior year quarter, a decline of 20 basis points, and increased by 38 basis points compared to the second quarter of fiscal 2011, when the Company's operating income as a percentage of net sales was 2.8%.
Fiscal 2011 Year to Date Summary
Net sales for the first nine months of fiscal 2011 totaled $3.37 billion, a 21.8% increase over the prior fiscal year comparable period. Diluted EPS was $1.25 per share including the dilutive effect from our equity offering completed in the first quarter of fiscal 2011, a 6.8% increase over the first nine months of fiscal 2010. Gross margin was 47 basis points less than the comparable prior year period, at 18.1% of net sales for the first nine months of fiscal 2011. At 15.1% of net sales through the nine months ended April 30, 2011, operating expenses were 25 basis points lower than the comparable prior year period.
Updates to Fiscal 2011 Guidance
Based on the Company's performance through the first nine months of fiscal 2011 and the current outlook for the remainder of the year, the Company is updating its net sales guidance for fiscal year 2011, ending July 31, 2011, to a range of $4.48 billion to $4.52 billion, which represents a 19.2% to 20.3% increase in total net sales over fiscal 2010. The Company had previously provided, on March 3, 2011, a net sales guidance target of $4.4 billion to $4.5 billion.
In addition, the Company is narrowing its earnings per share guidance for fiscal 2011 to a range of $1.67 to $1.69 per diluted share. The Company had previously updated its fiscal 2011 earnings per share guidance to $1.65 to $1.71 per diluted share in a press release on March 3, 2011.
Conference Call & Webcast
The Company's third quarter 2011 conference call and audio webcast will be held at 10:00 a.m. ET on June 2, 2011. The audio webcast of the conference call will be available to the public, on a listen-only basis, via the Internet at www.earnings.com or at the Investors section of the Company's website at www.unfi.com. The online archive of the webcast will be available on the Company's website for 30 days.
About United Natural Foods
United Natural Foods, Inc. (http://www.unfi.com) carries and distributes more than 60,000 products to more than 23,000 customer locations throughout the United States and Canada. The Company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel. United Natural Foods, Inc. was ranked by Forbes in 2005 as one of the "Best Managed Companies in America," ranked by Fortune in 2006 - 2010 as one of its "Most Admired Companies," winner of the Supermarket News 2008 Sustainability Excellence Award, and recognized by the Nutrition Business Journal for its 2009 Environment and Sustainability Award.
For more information on United Natural Foods, Inc., visit the Company's website at www.unfi.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. The risks and uncertainties which could impact these statements are described in the Company's filings under the Securities Exchange Act of 1934, as amended, including its annual report on Form 10-K filed with the Securities and Exchange Commission on September 27, 2010 and other filings the Company makes with the SEC, and include, but are not limited to, the Company's dependence on its principal customers; the Company's sensitivity to general economic conditions, including the current economic environment, changes in disposable income levels and consumer spending trends; the Company's ability to timely and successfully deploy its new warehouse management system throughout its distribution facilities; increased fuel costs; the Company's sensitivity to inflationary pressures; the relatively low margins and economic sensitivity of the Company's business; the Company's ability to successfully deploy its operational initiatives in the Canadian market; the ability to identify and successfully complete acquisitions of other natural, organic and specialty food and related product distributors; and management's allocation of capital and the timing of capital expenditures. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws. Any projections of future results of operations are based on a number of assumptions, many of which are outside the Company's control and should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced projections, but it is not obligated to do so.
SOURCE United Natural Foods, Inc.