Last updated on March 25th, 2021
United Natural Foods Inc. (UNFI) has released its financial results for the first quarter of fiscal 2019 ended Oct. 27, 2018.
Highlights of the report are outlined in the table below:
| 13-Week Period Ended | |||||||||||||
| ($ in thousands, except for per share data) | October 27, 2018 |
October 28, 2017 |
Change | ||||||||||
| Net Sales | $ | 2,868,156 | $ | 2,457,545 | $ | 410,611 | 16.7 | % | |||||
| Net (Loss) Income | $ | (19,294) | $ | 30,505 | $ | (49,799) | (163.2) | % | |||||
| Adjusted EBITDA | $ | 86,194 | $ | 84,824 | $ | 1,370 | 1.6 | % | |||||
| (Loss) Earnings Per Diluted Share (EPS) | $ | (0.38) | $ | 0.60 | $ | (0.98) | (163.3) | % | |||||
| Adjusted EPS | $ | 0.59 | $ | 0.60 | $ | (0.01) | (1.7) | % | |||||
“We closed on the previously announced purchase of Supervalu which will accelerate UNFI’s transformation of food distribution throughout North America,” said Steven L. Spinner, UNFI chairman and CEO. “The integration of the two companies is well underway, and we continue to be excited about the long-term creation of value for our shareholders we expect to deliver with this combination.”
Net sales of continuing operations by the customer channel for the first quarter of fiscal 2019 compared to the first quarter of fiscal 2018 were as follows ($ in millions):
| 13-Week Period Ended | ||||||||||
| Customer Channel | % Growth | October 27, 2018 | October 28, 2017 | |||||||
| Supernatural | 20.4% | $ | 1,027 | $ | 853 | |||||
| Independents | 4.4% | 667 | 639 | |||||||
| Supermarkets | 0.6% | 707 | 704 | |||||||
| Other | (7.3)% | 243 | 262 | |||||||
| Supervalu | 224 | — | ||||||||
| Total | 16.7% | $ | 2,868 | $ | 2,458 | |||||
Gross margin for the first quarter of fiscal 2019 was 14.38 percent of net sales and included a $1.8 million inventory fair value adjustment charge related to the acquisition of Supervalu. When adjusted for this charge, gross margin in the first quarter of fiscal 2019 was 14.44 percent of net sales compared to 14.94 percent of net sales in last fiscal year’s first quarter. The decline in the gross margin rate was driven by a shift in customer mix, including the growth of the supernatural channel, and increased inbound freight expense, partially offset by higher levels of vendor support and greater fuel surcharge income.
Restructuring, acquisition, and integration related expenses in the first quarter of fiscal 2019 were $68.0 million. This primarily was driven by $33.8 million of expenses related to change-in-control payments made to satisfy outstanding equity awards and severance as well as acquisition and integration costs of approximately $31.9 million.
Operating income was a $18.8 million loss in the first quarter of fiscal 2019 and included restructuring, acquisition and integration related expenses of $68.0 million and a $1.8 million inventory fair value adjustment charge associated with the purchase of Supervalu. When adjusted for these items, operating income was $51.0 million, or 1.78 percent of net sales, in the first quarter of fiscal 2019. Operating income in the first quarter of fiscal 2018 was $55.1 million, or 2.24 percent of net sales. The decrease in adjusted operating income was driven by lower gross margins, as a percent of net sales, and higher labor costs.
Adjusted EBITDA for the first quarter of fiscal 2019 was $86.2 million compared to $84.8 million for the first quarter of fiscal 2018.
Net income for the first quarter of fiscal 2019 was a $19.3 million loss, including $2.1 million of income related to discontinued operations, compared to $30.5 million for the first quarter of fiscal 2018.
Keep reading:
UNFI Completes Acquisition Of Supervalu, Reveals Leadership Team
