Shares of United Natural Foods, Inc. (UNFI), a natural and organic food company, are down more than 25% in pre-market on Wednesday after reporting lower profit in the third quarter, below Street view. The company also cut its full-year adjusted earnings outlook.
"Our profitability was impacted by a greater than expected decline in gross margins reflecting a challenging operating and macroeconomic backdrop, which contributed to lower inflationary benefits primarily related to reduced procurement gains, as well as higher shrink. Because of this pressure, we are reducing fiscal 2023 outlook for adjusted EBITDA and adjusted earnings per share," said UNFI CEO Sandy Douglas.
Profit for the third quarter decreased nearly 90% to $7 million or $0.12 per share from $67 million or $1.10 per share in the comparable quarter last year.
Excluding one-time items, earnings were $33 million or $0.54 per share, that missed the average estimate of analysts polled by Thomson-Reuters of $0.68 per share.
Net sales, however, increased 3.7% to $7.5 billion. The consensus estimate was for $7.51 billion.
Looking forward, the company now expects full-year adjusted EPS to be in the range of $1.80 - $2.30, compared with the prior outlook of $3.05 - $3.90. Analysts expect the company to report earnings of $3.32 per share for the year.
UNFI closed Tuesday's regular trading at $27.57, up 3.14%. It has traded in the range of $22.07 - $48.26 in the last 1 year.
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