United Natural Foods Inc.’s stock tumbled 20% in premarket trade Tuesday, after the grocery wholesaler swung to a fiscal fourth-quarter loss and posted sales that lagged estimates.
The Providence, Rhode Island-based company
UNFI,
had a net loss of $68 million, or $1.15 a share, for the quarter to July 29, after income of $39 million, or 63 cents a share, in the year-earlier quarter. It’s adjusted per-share loss came to 25 cents, narrower than the 39 cent loss consensus of FactSet analysts.
Sales rose to $7.417 billion from $7.273 billion, but were below the $7.467 billion FactSet consensus.
“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. We expect further headwinds as we continue to cycle elevated inflationary benefits during the first half of fiscal 2024,” CEO Sandy Douglas said in a statement.
Shrink can refer to damaged goods, but has lately more often meant shoplifting and is a problem that many retailers have complained about this earnings reporting season. Many have said it’s being conducted by organized gangs and is costing millions of dollars a year.
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United Natural Foods is now expecting fiscal 2024 per-share earnings to range from a loss of 88 cents to EPS of 38 cents, compared with a FactSet consensus for EPS of $1.94.
Sales are expected to range from $30.9 billion to $31.5 billion, compared with a consensus of $31.1 billion.
Separately, the company said it’s adding three independent directors to its board to work on a transformation plan that aims to improve profitability and better serve its customers.
Effective Sept. 28, Lynn Blake, James “Jim” Loree and James C. Pappas will join UNFI’s Board as new independent directors.
Blake comes to the role after years of experience in the investment industry as a leader at State Street Global Advisors.
Loree has more than four decades of experience at global industrial and consumer products businesses, including Stanley Black & Decker and General Electric.
For more, read: Dollar General’s stock tumbles after retailer misses earnings estimates and lowers guidance
Pappas founded JCP Investment Management in Houston in June 2009 and has spent much of his career at restaurant, food and retail businesses.
“We are taking decisive action to right size our cost structure,” Douglas sid.
“Alongside these step-change improvements to our business, we believe there may be additional actionable opportunities to focus our operations and create further value for shareholders,” he added.
The stock has fallen 51% in the year to date, while the S&P 500
SPX,
has gained 13%.
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