In a September 26^th release, United Natural Foods Inc. (UNFI) posted financial results for the 4^th quarter and fiscal 2023. UNFI disappointed on the top and bottom lines and provided uninspiring guidance for 2014, driving share price down 25 percent after the release. This Company is third-ranked in sales within the distribution segment of the food industry. Along with competitors, Sysco and US Foods, all are subject to the risks of currency fluctuation, inflation in costs for products, and rising labor and transport expenses in a competitive environment.

For the 4^th Quarter of FY 2023 ending July 29^th 2023, net loss was $(68) million on revenue of $7,417 million.  Comparable figures for the 4^th quarter of fiscal 2022 ending July 30^th were net income of $39 million on revenue of $7,273 million.  Diluted EPS fell 282 percent from $0.63 for the 4^th quarter of fiscal 2022 to $(1.15) for the most recent quarter. Comparing the 4^th quarter of 2022 with 2023, revenue was up 2.0 percent, influenced by inflation. Operating margin fell from 0.9 percent in Q4 2022 to (1.0) percent for the most recent quarter.

For the 4^th Quarter of 2023 sales to retail chains attained $3,141 million representing 42.3 percent for this channel) and $1,897 million (26.5 percent) to independent grocers.

For FY 2023 ending July 29^th 2022, net income was $24 million on revenue of $30,272 million with a diluted EPS of $0.40.  Comparable figures for fiscal 2022 ending July 30^th 2022 were net income of $248 million on revenue of $28,928 million with a diluted EPS of $4.07. 

In commenting on results Sandy Douglas CEO since 2011 stated, “Our fourth quarter concluded a challenging year in which we continued to emphasize serving customers and suppliers, and we also worked diligently to improve operating effectiveness, efficiency and our technological capabilities. 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.”

Douglas added “As we look to the new fiscal year, we’re focused on addressing near-term profitability while creating a structurally more efficient technology-enabled food retail services company that can better serve our customers and capitalize on the significant growth opportunities we see ahead. We’re confident that combining our industry leading position with a more dynamic and nimble UNFI under the guidance of our newly refreshed Board puts us on a strong path to drive meaningful and sustainable long-term shareholder value creation.”

The Company announced the termination of Christopher Testa as president on October 4th.

Guidance for FY 2024 included net revenue of $31,000 million to $31,500 million; Net loss ranging from $(36) million to $(110) million with an EPS of $(0.60) to $(1.86).

On July 29^th 2022 UNFI posted assets of $7,394 million (including $742 million in goodwill, lease obligations and intangibles) against long-term debt of $3,227 million. The Company had an intraday market capitalization of $827 million million on August 2^nd. UNFI trades with a forward P/E of 11.1 and has ranged over a 52-week period from $13.91 to $47.88 with a 50-day moving average of $19.42.  Twelve-month trailing operating margin was 0.6 percent and profit margin <0.1 percent.  Return on assets over the past twelve months attained 1.6 percent and the return on equity was 1.7 percent. At close of trading on Monday September 25^th UNFFI was priced pre-release at $18.91 falling sharply at the opening post-release on Tuesday September 26^th to $14.70