United Natural Foods (NASDAQ:UNFI) stock slumped by a third in early trade after the company reported second-quarter earnings that fell short of expectations and slashed its full-year earnings guidance.
The company, which distributes organic and natural foods to grocers including Whole Foods Market, reported a 5.4% rise in net sales to $7.8 billion for the 13 weeks to January 28, 2023. Net income fell 71% to $19 million, while diluted earnings per share (EPS) were down by the same margin at $0.31. Adjusted EPS decreased 43% to $0.78.
“While I’m pleased with our continued sales growth, profitability in the quarter was lower than recent levels and our plan,” UNFI CEO Sandy Douglas said in a statement.
“Profits were challenged as we did not repeat the significant level of procurement gains from rapidly accelerating inflation and inventory gains, due to supply chain volatility, that we experienced in the second quarter of last year. As a result of these challenges, we are reducing our profitability expectations for fiscal 2023 and withdrawing our fiscal 2024 targets.”
While the company now expects full-year sales of $30.1 billion to $30.5 billion, slightly higher than previous guidance, it expects adjusted EPS of $3.05 to $3.90, down from previous estimates of $4.85 to $5.15.
The stock was down 33% at $27.45 shortly after 9:30am in New York.
Contact the author at stephen.gunnion@proactiveinvestors.com