United Natural Foods Inc. reports third-quarter fiscal 2022 results, raises full-year outlook

June 14, 2022
United Natural Foods Inc. (UNFI) reported financial results for the third quarter of fiscal 2022 (13 weeks) ending April 30, 2022.

Third-quarter fiscal 2022 highlights (comparisons to third-quarter fiscal 2021): 

  • Net sales of $7.2 billion, an increase of 9.2%.
  • Net income of $67 million, an increase of 39.6%.
  • Earnings per diluted share (EPS) of $1.10, an increase of 37.5%.
  • Revises definitions of adjusted EBITDA and adjusted EPS to exclude the non-cash LIFO charge or benefit.
  • Adjusted EBITDA of $196 million, an increase of 5.9%.
  • Adjusted EPS of $1.10, an increase of 10.0%.
  • Updates full-year outlook for net sales, net income, EPS, adjusted EBITDA and adjusted EPS.
  • Refinances and upsizes revolving credit facility by $500 million with June 2027 maturity date.

“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 Chief Executive Officer Sandy Douglas said in the announcement. “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.”

Third-quarter fiscal 2022 summary

Net sales increased 9.2% in the third quarter of fiscal 2022 compared to the same period last year, primarily driven by inflation and new business from both existing and new customers, including the benefit of cross selling, partially offset by supply chain challenges and modest market contraction.

Gross margin rate in the third quarter of fiscal 2022 was 14.0% of net sales and included a $72 million, or 1.0% of net sales, LIFO charge. Excluding this non-cash charge, gross margin rate was 15.0% of net sales. Gross margin rate in the third quarter of fiscal 2021 was 14.6% of net sales and included a $5 million, or 0.1% of net sales, LIFO charge. Excluding this non-cash charge, gross margin rate in the third quarter of fiscal 2021 was 14.7% of net sales. The increase in gross margin rate, excluding the LIFO charge, was driven by improvements in the wholesale segment margin rate, including the impact of inflation and the company’s ValuePath initiative, partially offset by changes in customer mix.

Net income for the third quarter of fiscal 2022 was $67 million, which included an $88 million pre-tax gain on sale of assets of related to a distribution center, a $72 million pre-tax LIFO charge, and $8 million of pre-tax restructuring, acquisition and integration related expenses. Net income for the third quarter of fiscal 2021 was $48 million, which included $10 million of pre-tax restructuring, acquisition and integration related expenses and a $5 million pre-tax LIFO charge.

Net income per diluted share (EPS) was $1.10 for the third quarter of fiscal 2022 compared to net income per diluted share of $0.80 for the third quarter of fiscal 2021. Adjusted EPS was $1.10 for the third quarter of fiscal 2022 compared to $1.00 in the third quarter of fiscal 2021.

Adjusted EBITDA for the third quarter of fiscal 2022 was $196 million compared to $185 million for the third quarter of fiscal 2021.

Find the full report here.

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