United Natural Struggles With Millbrook Integration

United Natural Foods saw its stock plummet on Friday after an earnings report that detailed challenges in its Millbrook Distribution division, which it acquired late last year.

DAYVILLE, Conn. — United Natural Foods here saw its stock plummet on Friday after an earnings report that detailed challenges in its Millbrook Distribution division, which it acquired late last year. “We had originally forecasted being able to restore historical gross margins at Millbrook as well as reduce some initial overhead to be neutral to our earnings within the first four to five months,” said Michael Funk, president and chief executive officer, United. “We now believe it will take another two quarters to establish the purchasing efficiencies and the leverage synergies with [United’s] purchasing, transportation and operation department to fully reach this goal.” The company reduced its per-share earnings guidance for the year by 18 cents to 20 cents, to $1.12-$1.24, for the full fiscal year. Net income for the second quarter, which ended Jan. 26, fell 16.5%, to $9.1 million, on a sales increase of 24.2%, to $830.7 million. Through the first six months, net income slid 2.8%, to $22.7 million, on a sales increase of about 19%, to $1.57 billion.

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