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United Natural Foods (UNFI) 2Q Earnings, Sales Rise On Strond Demand

 February 26, 2013 10:17 AM

(By Balaseshan) United Natural Foods Inc. (NASDAQ: UNFI) posted higher earnings and sales growth for the second quarter on strong demand for its natural and organic products. However, the company lowered its 2013 earnings forecast.

The distributor of natural, organic and specialty foods delivered earnings per share (EPS) rose 2.2 percent to 46 cents, which included the negative impact of $0.04 related to the Auburn, Washington labor action, while Street predicted $0.50.

GAAP net income rose 2.8 percent to $22.6 million. Net sales jumped 12.3 percent to $1.45 billion, while Wall Street analysts expected revenue growth of 12.90 percent.

[Related -United Natural Foods, Inc. (UNFI) Q1 Earnings Preview: Can UNFI Post Another Beat?]

Gross margin shrank 62 basis points to 16.7 percent for the three months ended January 26, due to the continued shift in customer mix to the conventional supermarket and supernatural channels.

"Our sustained top-line growth reflects strong consumer demand being fueled by more people maintaining healthier lifestyles. We expect this trend to continue for the foreseeable future and will continue with our mission to supply natural and organic products that meet their growing needs," commented CEO Steven Spinner.

Looking ahead into the fiscal 2013, the company lowered its GAAP EPS guidance to range of $2.12 to $2.18 from previous forecast range of $2.14 to $2.24. Adjusted EPS for the full year are expected to be about $2.15 to $2.21, which represents an increase of about 10.8% to 13.9% over last year's adjusted EPS of $1.94. Street currently predicts EPS of $2.22.

[Related -Stock Upgrades And Downgrades: ADBE, AJG, BBRY, BLL, CLF, RYN, S, UNFI]

The company expects to incur about $0.6 million to $1.0 million in additional expenses related to the Auburn, Washington labor issue in the third quarter of fiscal 2013.

UNFI is trading down 3.00 percent at $51.41 on Tuesday. Over the past year, shares have been trading between $44.08 and $61.26.

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