United Natural Foods, Inc., is hoping a technology-driven strategy for 2024 will help make unimpressive 2023 fourth quarter financial results a quick and distant memory.
While the Providence, R.I.-based grocery wholesaler did record a 2% year-over-year sales increase of $7.4 billion, ultimately the company suffered losses this quarter which impacted the bottom line. Unit sales for the quarter were also down.
Gross profit over the 13-month span that ended July 29 was $1 billion, down 8.3% ($87 million) compared to fourth quarter 2022.
Net loss came in at $68 million while net income in the fourth quarter of 2022 was $39 million.
Operating expenses for Q4 2023 were just over $1 billion, which is a slight year-over-year increase ($980 million in Q4 2022).
Adjusted EBITDA was $93 million compared to $213 million a year ago.
“Our fourth quarter concluded a challenging year in which we continued to emphasize serving customers and suppliers, and we also worked diligently to improve operating effectiveness, efficiency and our technological capabilities, said Sandy Douglas, UNFI Chief Executive Officer. “While we grew sales across all of our customer channels, profitability declined primarily due to a decrease in inflation driven procurement gains and elevated shrink. We expect further headwinds as we continue to cycle elevated inflationary benefits during the first half of fiscal 2024.”
For FY 2024, UNFI is looking at sales to be as high as $31.5 billion and a net loss to be as low as $36 million.=
Douglas said he believes that leaning into technology will help to turn a profit.
“To that end, we’ve already captured nearly $100 million of near-term value creation initiatives, and we now expect to drive full-year operating margin benefits in fiscal 2024 of nearly $150 million from these actions,” he said. “We’re continuing to invest in our supply chain and technology infrastructure to improve our cost structure and enhance the customer and supplier experience.”