Natural and organic food distributor United Natural Foods, Inc. (Nasdaq: UNFI) reported net sales of $887.0 million for 3Q08, ending April 26, 2008, an increase of approximately $154.4 million, or 21%, from net sales of $732.5 million recorded a year ago.
As a result, shares of the company’s stocked jumped 11.7% to $20.41 on Tuesday, according to an Associated Press report.
Excluding the effect of the company’s November 2007 acquisition of Millbrook Distribution Services, Inc., net sales increased by approximately $77.2 million, or 10.5%, to $809.7 million.
The company reported net income of $13.0 million, or $0.30 per diluted share, for 3Q08.
The company said the acquisition of Millbrook in 2Q08, negatively impacted net income by approximately $2.4 million, or $0.06 per diluted share, for 3Q08–in line with the company’s projections.
Excluding the effect of Millbrook, net income for 3Q08 would have been $15.4 million, or $0.36 per diluted share, compared to $13.7 million, or $0.32 per diluted share a year ago.
Operating expenses for the quarter were $141.0 million, or 15.9% of net sales, compared to $104.8 million, or 14.3% of net sales, for 3Q07. The company said it continues to experience start-up inefficiencies at its Sarasota, Florida and Portland, Oregon area distribution facilities, which negatively impacted operating margins in the quarter.
"Despite operating in an environment of rising fuel and commodity prices, our growth was in line with our expectations, with solid growth across our sales channels," said Michael Funk, President and CEO. "During the quarter, we continued to make progress achieving efficiencies at our Millbrook specialty division, and we remain confident that we can achieve breakeven operating results in that division in the first quarter of fiscal 2009, as previously announced."
Updates Fiscal 2008 Earnings Guidance
The Company is narrowing its projected net sales guidance for fiscal year 2008, ending August 2, 2008, to $3.3 billion to $3.35 billion, which represents a 19% to 20% increase in net sales over fiscal 2007. Previously, the Company had projected net sales for fiscal 2008 to be in the range of $3.27 billion to $3.35 billion.
The company expects that its capital expenditures in the fourth quarter will be associated primarily with its previously announced plans to open distribution facilities in Moreno Valley, California and York, Pennsylvania, which are expected to begin operations in fiscal 2009.
About United Natural Foods
United Natural Foods, Inc. carries and distributes more than 60,000 products to more than 17,000 customers nationwide. The company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel. United Natural Foods, Inc. was ranked by Forbes in 2005 as one of the "Best Managed Companies in America," ranked by Fortune in 2006 and 2007 as one of its "Most Admired Companies," and ranked by Business Ethics as one of its "100 Best Corporate Citizens for 2006."
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