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United Natural Foods (NYSE:UNFI) fell in early trading on Wednesday after posting a mixed FQ1 earnings report. Revenue was up 0.3% year-over-year to $7.55B vs. $7.3B consensus. The slight revenue gain primarily driven by inflation and new business with existing customers, primarily in UNFI’s Supernatural channel. Those increases were largely offset by a decrease in units sold. While unit volumes continued to decline, there was 60 basis points of sequential improvement from levels in the fourth quarter of fiscal 2023.
Gross profit was 14.6% of sales during the quarter and included a $21M LIFO charge. Excluding that non-cash charge, the gross profit rate was 14.8% of sales. The decrease in gross profit rate, excluding the LIFO charge, was primarily driven by lower levels of procurement gains resulting from decelerating inflation. EPS for the quarter slotted in at -$0.04 vs. -$0.34 consensus and $1.13 a yeara ago. Adjusted EBITDA fell 43.5% year-over-year to $117M during the quarter.
“Our performance this quarter exceeded our expectations as we drove improved operational execution, which helped deliver savings from our near-term value creation initiatives earlier in the year than previously expected. These savings partially offset the anticipated decline in procurement gains resulting from lower levels of inflation,” stated CEO Sandy Douglas.
Looking ahead, United Natural Foods (UNFI) sees 2024 sales of $30.9B to $31.5B vs. $31.0B consensus and 2024 EPS of -$0.88 to $0.38 vs. -$0.11 consensus.
Shares of United Natural Foods (UNFI) dropped 1.35% in premarket trading to $16.10.
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