PROVIDENCE, R.I. - United Natural Foods , Inc. (NYSE: NYSE:UNFI), a leading grocery wholesaler, announced its financial results for the third quarter of fiscal 2024, surpassing analyst expectations for adjusted earnings per share (EPS).
The company reported an adjusted EPS of $0.10, which was $0.08 higher than the analyst estimate of $0.02. However, net sales slightly missed the consensus estimate, coming in at $7.5 billion compared to the expected $7.51 billion, marking a marginal decrease of 0.1% compared to the same quarter last year.
The company's net loss stood at $21 million, with a loss per diluted share (EPS) of -$0.34, reflecting a significant decline from the net income of $7 million and EPS of $0.12 reported in the third quarter of fiscal 2023. Adjusted EBITDA also saw a decrease of 18.2% to $130 million. Gross profit for the quarter increased by $20 million, or 2.0%, with a gross profit rate of 13.6% of net sales including a $6 million LIFO charge.
Operating expenses increased by $25 million primarily due to a $33 million increase in incentive compensation. Interest expense for the quarter was up slightly to $37 million, driven by higher average interest rates.
CEO Sandy Douglas commented on the results, highlighting the company's in-line performance with its fiscal 2024 plan and the third consecutive quarter of improving profitability. Douglas attributed the success to cost reduction actions and supply chain efficiencies, expressing confidence in the company's ability to drive further improvement. Looking ahead, Douglas anticipates the new multi-year strategic plan starting in fiscal 2025 to generate free cash flow approaching $100 million and stable profit and cash flow growth.
For fiscal 2024, United Natural Foods has revised its outlook, lowering expectations for net income and EPS mainly due to charges related to cost reduction actions. However, the company has raised the midpoints for adjusted EBITDA and adjusted EPS while reducing capital and cloud implementation expenditures.
The updated full-year outlook now anticipates an adjusted EPS range of -$0.20 to $0.20, with a midpoint at $0.00, which is $0.25 above the previous midpoint and aligns with the consensus estimate. The expected revenue remains unchanged at $30.5-31 billion.
United Natural Foods ended the quarter with a net debt to Adjusted EBITDA leverage ratio of 4.6x and total liquidity of approximately $1.26 billion. The company's focus remains on strengthening its operational and financial performance and capital structure.
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