UNFI 3Q Results Show Turnaround

UNFI 3Q Results Show Turnaround

DAYVILLE, Conn.--United Natural Foods Inc. (NASDAQ:UNFI) reported results for its third quarter ended April 30 and indicated the continuing success of its efforts to turn around various aspects of its distribution business. Revenues increased to $229.2 million, up slightly from $226.9 million sold in the comparable period a year ago. Gross profit declined 3.5 points to 17.7 percent of sales, while operating expenses inched up about one point as a percentage of sales to $40.8 million. Net income settled at $1.8 million or $.10 per share, compared to $5.1 million or $.28 per share earned a year ago.

Management attributed the operating results to previously announced issues regarding its consolidation of Eastern Region systems and various low-margin, high-expense Eastern operations. Michael Funk, chief executive officer, stated, "We are very pleased to report a turnaround in the performance of the company and the achievement of our third quarter earnings targets." He reported that operations are fully restored in the Eastern Region and benefits are already being reaped from recent operational changes intended to return the company to profitability. He added that fill rates at Eastern Region facilities have returned to 95 percent and inventory levels have returned to 55 days on hand.

Nevertheless, Funk said the closing of its Chicago facility and four retail stores had a negative effect on revenues. He also said that sales in the East continue to be soft.