United Natural Foods
were sinking Tuesday after the company pivoted to a loss in its latest quarter and issued disappointing guidance.
United Natural (ticker: UNFI), which distributes organic and natural foods to grocers including
‘s (AMZN) Whole Foods Market, posted an adjusted loss of 25 cents a share for its fiscal fourth quarter. That’s a sharp drop from per-share earnings of $1.27 in the year-ago period, but narrower than the 39-cent loss analysts had penciled in, according to FactSet.
“While we grew sales across all of our customer channels, profitability declined primarily due to a decrease in inflation driven procurement gains and elevated shrink,” said CEO Sandy Douglas in the earnings release. “We expect further headwinds as we continue to cycle elevated inflationary benefits during the first half of fiscal 2024.”
And indeed, the company said for fiscal 2024, it expects an adjusted earnings range between a loss of 88 cents a share and earnings of 38 cents a share, while Wall Street had called for earnings of $1.94 a share.
“This outlook reflects lower levels of anticipated procurement gains, driven by moderating levels of inflation, as well as the restoration of performance-based incentive cash compensation in fiscal 2024,” according to the earnings release.
United Natural Foods stock tumbled 22% to $14.74 in Tuesday morning trading, putting it on pace for its lowest close since October 2020, according to Dow Jones Market Data.
The company’s results have disappointed investors in recent quarters. When the company posted second-quarter earnings on March 8, shares dropped 28% and after reporting third-quarter earnings on June 7, they fell 15%, according to FactSet.
This year, shares have dived 62%.
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