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UNFI Q3 sales rebound atop prior-year cycling of pandemic gains

Whole Foods, independent grocers drive more than 14% sales increases

Russell Redman

June 7, 2022

3 Min Read
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UNFI saw total net sales climb 9.2% year over year in fiscal 2022 Q3 after reporting a 5.9% decrease in the fiscal 2021 quarter.United Natural Foods Inc.

United Natural Foods Inc. (UNFI) topped Wall Street’s earnings forecast and turned in across-the-board net sales gains for its fiscal 2022 third quarter, after cycling pandemic-fueled sales increases a year ago.

For the quarter ended April 30, net sales totaled $7.24 billion, up 9.2% from $6.63 billion a year earlier, Providence, R.I.-based UNFI said Tuesday. The grocery distributor had reported a 5.9% net sales decrease in the fiscal 2021 quarter, though results were up 6.7% on a two-year stack.

The Independent business segment (retail customers with fewer than 10 stores) posted the strongest growth in the third quarter, with net sales jumping 14.6% to $1.83 billion. Seeing nearly the same uptick was the Supernatural unit — consisting of Amazon-owned Whole Foods Market — where net sales climbed 14.1% to $1.47 billion. UNFI’s Supernatural segment was the only business to generate a net sales increase ( 0.6%) in the prior-year period.

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UNFI's Supernatural unit — consisting of Whole Foods Market — recorded a Q3 net sales gain of 14.1%, just behind the 14.6% uptick generated by the distributor's Independent grocery channel.

UNFI’s largest business unit, Chains (retail customers with more than 10 stores), also tallied solid Q3 growth as net sales advanced 5.2% to $3.11 billion. At the Other unit — encompassing international customers outside Canada, foodservice, e-commerce, conventional military and other business — net sales rose 7.9% to $625 million.

Related:UNFI earns validation for science-based emissions reduction targets

Meanwhile, net sales at UNFI’s Retail segment — Cub Foods and Shoppers supermarket chains — edged up 2% to $602 million. Currently, the business includes 53 Cub Foods and 21 Shoppers stores.

“Our third-quarter performance further demonstrates UNFI’s agility and its focus on servicing customers despite a challenging operating environment. It’s apparent that our ‘Fuel the Future’ strategy is working and beginning to benefit our customers,” UNFI CEO Sandy Douglas said in a statement. “As we look towards a successful end to our fiscal year, we continue to make progress in simplifying our business and focusing resources on the most important areas that create value for our customers, suppliers and shareholders.”

On the earnings side, UNFI reported fiscal 2022 third-quarter net income (attributable to the company) of $67 million, or $1.10 per diluted share, compared with $48 million, or 80 cents per diluted share, a year ago. The company said net earnings for the 2022 quarter reflect included an $88 million pretax gain on sale of assets related to a distribution center, a $72 million pretax LIFO charge, and $8 million of pretax restructuring, acquisition and integration expenses.

On an adjusted basis, UNFI’s net income per diluted share for Q3 2022 came in at $1.10 versus $1.00 a year earlier. Analysts, on average, had projected adjusted EPS of 97 cents, with estimates ranging from 86 cents to $1.05, according to Refinitiv.

Related:UNFI expands American Artisan Cheese and Specialty Program

Looking ahead, UNFI updated its full-year fiscal 2022 (ending July 30) guidance, raising its estimates for reported EPS to $3.75 to $4.00 (from $3.60 to $3.90) and adjusted EPS to $4.65 to $.90 (from $4,20 to $4.50). Analysts’ average estimate, before UNFI’s earnings report today, was for adjusted EPS of $4.15, with estimates running from $4.00 to $4.34, according to Refinitiv.

UNFI lifted its net sales forecast at the top and bottom ends to between $28.8 billion and $29.1 billion (from $27.8 billion to $28.3 billion). Adjusted EBITDA is pegged at $810 million to $830 million, up from the previous outlook of $785 million to $815 million.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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