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United Natural Foods Q4 Results Miss Wall Street View; Shares Down 11%

Shares of United Natural Foods Inc. (UNFI) slumped over 11 percent on extended session Thursday after the company reported a drop in profit for the fourth quarter, hurt largely by lower-than expected revenues, weak gross margins and higher operating costs. Earnings for the quarter also missed Wall Street estimates.

United Natural Foods' fourth-quarter profit dropped to $32.8 million or $0.64 per share from $38.9 million or $0.76 per share last year.

Adjusted earnings for the quarter were $0.76 per share, up from $0.72 per share. On average 17, analysts polled by Thomson Reuters estimate earnings of $0.85 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter grew 10.7 percent to $2.59 billion from $2.34 billion last year. Analysts had a consensus revenue estimate of $2.61 billion for the quarter.

"We continued to deliver solid top-line growth across our customer channels, demonstrating sustained strong demand for UNFI's product assortment and services. On the bottom-line, our results reflected the impact of customer mix shift and higher than anticipated freight costs, while improvement in our working capital has resulted in record free cash flow for the quarter," said CEO Steven Spinner.

"We are on track to close the SUPERVALU transaction in the fourth quarter of calendar 2018, and our teams are hard at work planning for the integration to capture the significant synergies and strategic benefits of this transformative combination, positioning our company for growth and value creation."

Gross margin dropped to 14.50 percent from 15.75 percent last year.

Looking forward to the full year 2019, the company expects adjusted earnings of $3.48 to $3.58 per share and revenues of $11.1 to 11.3 billion. Analysts currently estimate earnings of $3.54 per share and revenues of $11.03 billion.

UNFI closed Thursday's trading at $33.85, up $0.55 or 1.65%, on the Nasdaq. The stock, however, slipped $3.74 or 11.05% in the after-hours trade.

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