By Senad Karaahmetovic
United Natural Foods (NYSE:UNFI) shares are down more than 30% today after the grocery wholesaler withdrew its forecasts for fiscal 2024, slashed the 2023 outlook, and reported weaker-than-expected profit for its second fiscal quarter.
The company reported FQ2 EPS of $0.78 on revenue of $7.8 billion, which compares to the consensus for earnings of $1.45 on sales of $7.77B. While quarterly sales rose 5% year-over-year, the company’s adjusted Ebitda came in at just $181 million while analysts were expecting $229.3M.
“While I’m pleased with our continued sales growth, profitability in the quarter was lower than recent levels and our plan. Profits were challenged as we did not repeat the significant level of procurement gains from rapidly accelerating inflation and inventory gains, due to supply chain volatility, that we experienced in the second quarter of last year,” said Sandy Douglas, UNFI’s Chief Executive Officer.
“As a result of these challenges, we are reducing our profitability expectations for fiscal 2023 and withdrawing our fiscal 2024 targets.”
The company’s new FY23 guidance calls for EPS in the range of $3.05-3.90 on revenue of $30.1-30.5B. This is a material downgrade for the profit outlook compared to the prior forecast for EPS of $4.85-5.15.
Goldman Sachs analysts took note of a sharp stock selloff due to “the F2Q miss, lowered FY23 guidance, and removal of FY24 targets related to a lower profitability outlook.”