Investments in supply chain efficiencies are beginning to pay off for United Natural Foods (UNFI) as the company achieved improved profitability in the fiscal first quarter despite a modest loss in sales.
Shares are up almost 5% in premarket trading after an 8% plunge during Monday’s regular trading session.
“Our network optimization is proceeding ahead of schedule, and the benefits of recent supply chain investments, coupled with process improvements, is enabling us to strengthen service levels and increase throughput. This helped us deliver adjusted EBITDA growth of nearly 25%, free cash flow meaningfully above last year and a sequential net leverage decline,” said Sandy Douglas, UNFI’s CEO.
Reflecting the closure of several retail stores and the transition out of the Allentown, PA distribution center, sales were down 0.4% to $7.8B, missing expectations by $110M.
But as efficiencies began to gain traction, including improved customer service, profitability improved dramatically from a loss of $0.35 per share to a loss of $0.06 in the fiscal first quarter. On an adjusted basis, United Natural Foods (UNFI) earned a profit of $0.56 per share, up 250% from last year and $0.16 better than anticipated.
Additionally, a key operating income metric rose 25% to $167M. Operating expenses were 12.7% of net sales compared to 12.9% in the same quarter last year, driven by higher levels of distribution center productivity.
Free cash flow improved from negative $159M to negative $54M.
For fiscal 2026, the company continues to expect net sales to be within the range of $31.6M to $32M versus $32.2M estimates. Adjusted earnings are seen to be between $1.50 and $2.30 per share with a midpoint of $1.90 that is below the $2.00 estimate. Adjusted EBITDA is targeted for $630M to $700M versus $552M in FY25.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.