United Natural Foods, Inc. (NASDAQ: UNFI) is North America’s premier food wholesaler delivering the widest variety of products to customer locations throughout North America including natural product superstores, independent retailers, conventional supermarket chains, e-commerce retailers, and foodservice customers.  By providing this deeper ‘full-store’ selection and compelling brands for every aisle, UNFI is uniquely positioned to deliver great food, more choices, and fresh thinking to customers everywhere. Combined with SUPERVALU, UNFI is the largest publicly-traded grocery distributor in America with expected annual sales of over $21 billion.

 

The company closed on the previously announced purchase of SUPERVALU which will accelerate UNFI’s transformation of food distribution throughout North America. As per management, this acquisition was and is all about the creation of value. UNFI is transforming the way in which food is supplied throughout North America through synergy, scale, services, products, and people, providing better food for a better future. The integration of the two companies is well underway, and the company is excited about the long-term creation of value, which they expect to deliver with this combination.

 

Key accomplishments of first quarter fiscal 2019

• Completed the acquisition of SUPERVALU
• Grew legacy UNFI sales by nearly 8%
• Integration work proceeding as planned
• Affirming cost synergy outlook of more than $185M in year 4.

 

On Dec. 06, 2018, the Company reported business progress and financial results for the first quarter of fiscal 2019 ended October 27, 2018.

_____________________________________________________________________

Our members have booked up to 800% with our recent well timed (2018) NASDAQ and NYSE small cap reports. We will be initiating coverage on another exciting small cap security within the next ten days (December 11th-20th, 2018). Stop missing out on stocks that run, receive our reports in real time on your cell phone, text the word “Traders” to “25827” 

View our recent picks, track record, long term biotech picks and sign up for our real time, low float and breakout mobile/text alerts here – https://tradersnewssource.com/traders-news-source-new-members/

_____________________________________________________________________

The results for the current quarter was lower than the company’ expectations, and UNFI also faced multiple headwinds, including:

• The macroeconomic environment of retail continues to be challenging, more and more retailers competing for their share of the consumers’ dollar.
• SUPERVALU’s performance where trends have weakened, causing us to reset near-term expectations.
• Like many distribution companies, United Natural continued to be challenged with higher labor costs and productivity issues related to serving this busy holiday season and the addition of temporary labor where needed.
• Continued supplier out of stocks, which were approximately 80 basis points higher than the first quarter of last year.

 

Notwithstanding the near-term, industry headwinds which impinged the company’s results, the company’s overall fundamentals continue to remain robust, and the management believes that the company will overcome the near-term sales headwinds. In fact, UNFI has plans in place to mitigate the operating challenges both in short and in the long-term, and it is rapidly progressing in the vision of transforming the North American food supply chain for retail.

UNFI is expected to serve its shareholders over the long-term by becoming the premier wholesaler of products and services throughout North America. This thesis has not changed. As UNFI have begun to integrate, the outlook for the combination is stronger than ever. Analyst tracking the stock is extremely excited about the fact that the combination of UNFI and SUPERVALU will translate into more significant value for shareholders than UNFI as a standalone company over time.

 

Analyst ratings and target price:

Per www.marketbeat.com, Their average twelve-month price target is $32.69, suggesting that the stock has a possible upside of 119.69%. The high price target for UNFI is $53.00, and the low-price target for UNFI is $18.00. There are currently four sell ratings, 11 hold ratings and 3 buy ratings for the stock, resulting in a consensus rating of “Hold.”

 

Below are the excerpts of recent analyst rating/Price targets on the company:

Source: www.marketbeat.com

 

 

Financial Highlights: (In thousands, except share and per share amounts)

FYE is July 31st

 

• Net sales increased approximately 16.7%, or $410.6 million, to $2.87 billion for the 13-week period ended October 27, 2018, from $2.46 billion for the 13-week period ended October 28, 2017
• UNFI’ gross profit increased approximately 12.3%, or $45.1 million, to $412.3 million for the 13-week period ended October 27, 2018, from $367.2 million for the 13-week period ended October 28, 2017. UNFI’ gross profit as a percentage of net sales decreased to 14.38% for the 13-week period ended October 27, 2018, compared to 14.94% for the 13-week period ended October 28, 2017.
• 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.
• Operating income decreased approximately 134.2%, or $73.9 million, to an operating loss of $18.8 million for the 13-week period ended October 27, 2018, from operating income of $55.1 million for the 13-week period ended October 28, 2017. As a percentage of net sales, operating loss was 0.66% for the13-week period ended October 27, 2018, as compared to 2.24% for the 13-week period ended October 28, 2017.
• The Company had a net loss of $19.3 million, a loss of $0.38 per diluted common share, for the 13-week period ended October 27, 2018, compared to net income of $30.5 million, or$0.60 per diluted common share, for the 13-week period ended October 28, 2017.

 

Fiscal 2019 Guidance – 53 weeks: Consolidated UNFI – Assumes existing retail store base operated through Fiscal 2019

 

 

Fiscal 2019 Guidance – What’s Changed: Changes to Adjusted EPS Guidance Driven By

 

Key risk factors and potential stock drivers:

• The company’ business risk profile is impacted due to the various macro trends, and its ability to withstand these near-term headwinds would continue to remain a key monitorable.
• Company’ ability to maintain liquidity and financial flexibility to fund its incremental capital requirements will remain a challenge for the company.
• Food wholesale business has witnessed intense competition, with deep discounts and pricing competition by several players in the industry. There could be competitors with higher financial resources and greater market reach and UNIF Inability to effectively compete with them could hurt its business profile.
• Failure to identify changing trends and industry preference is an important factor which has a bearing on the company’ performance over the medium to longer term.

 

Stock Performance

Comments:

• On Friday, Dec 7th, 2018, UNFI closed at $14.88, with an average volume of 1.59 million shares exchanging hands. Market capitalization is $763.533 million. The current RSI is 12.47
• In the past 52 weeks, shares of UNFI have traded as low as $14.15 and as high as $68.05
• At $14.88, shares of UNFI are trading below its 50-day moving average (MA) at $24.41 and below its 200-day moving average (MA) at $36.78
• The present support and resistance levels for the stock are at $12.43 & $18.93 respectively.

 

 

Disclaimer

Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.

Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Vikas Agrawal, CFA. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.

This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.

We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.

When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.

17B Disclosure

Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.

PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.

Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.

TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.

The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.

Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.