United Natural Foods, Inc. Announces Third Quarter Fiscal 2015 Results, Net Sales Up 18.7 Percent

June 9, 2015

PROVIDENCE, R.I.--(BUSINESS WIRE)--Jun. 8, 2015-- United Natural Foods, Inc. today reported financial results for the third quarter of fiscal 2015 ended May 2, 2015.

Net sales for the third quarter of fiscal 2015 increased 18.7%, or $332.9 million, to $2.11 billion from $1.78 billion in the third quarter of fiscal 2014. The third quarter of fiscal 2015 included net sales of approximately $213.7 million from the Company's acquisition of Tony's Fine Foods ("Tony's") in the fourth quarter of fiscal 2014. Gross margin decreased 132 basis points to 15.4% for the third quarter of fiscal 2015 compared to 16.7% for the same period last year. The decrease was primarily due to the dilution from Tony's net sales, the unfavorable foreign exchange rate for the Company's Canadian business, lower fuel surcharges, and a shift in mix of sales.

Total operating expenses were 12.2% as a percentage of net sales for the third quarter of fiscal 2015, a decrease of 107 basis points compared with the same period last fiscal year. Total operating expenses increased $21.4 million, or 9.1%, to $256.9 million for the third quarter of fiscal 2015 compared to $235.5 million in the third quarter of fiscal 2014, primarily due to additional costs required to service higher sales volume. Total operating expenses for the third quarter of fiscal 2015 included startup costs of approximately $0.5 million related to the Company's Hudson Valley, New York and Prescott, Wisconsin facilities offset by a $0.6 million energy grant received as a result of incorporating eligible energy saving designs into the Company's Hudson Valley, New York facility. Total operating expenses for the third quarter of fiscal 2014 included startup costs of approximately $0.9 million related to the Company's Racine, Wisconsin facility as well as $0.6 million of costs related to the acquisition of Tony's.

Operating income increased 10.2%, or $6.4 million, to $69.0 million for the third quarter of fiscal 2015 compared to $62.6 million for the third quarter of fiscal 2014. As a percentage of net sales, operating income for the third quarter of fiscal 2015 decreased 25 basis points to 3.3% compared to the same period last fiscal year.

Net income for the third quarter of fiscal 2015 increased $5.4 million, or 14.7%, to $41.8 million, or $0.83 per diluted share, from $36.4 million, or $0.73 per diluted share, for the third quarter of fiscal 2014. Net income for the third quarter of fiscal 2015 includes a gain of $4.2 million associated with a transfer of land at the Company's Prescott, Wisconsin facility.

“Our acquisition of Tony’s Fine Foods, which expanded our presence in fresh foods, has exceeded our expectations as consumer interests continue to shift towards the perimeter of the store,” added Mr. Spinner. “In combination with our Albert’s Organics business, UNFI is well-positioned to capitalize on the consumers’ demands for fresh products. Additionally, UNFI’s investment in refrigerated infrastructure will serve as a catalyst towards increased growth and market share as the platform moves across the country.” View the full report here.

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