United Natural Foods Inc. (UNFI) reported financial results for the first quarter of fiscal 2023 (13 weeks) ending October 29, 2022.
First-quarter fiscal 2023 highlights (comparisons to first-quarter fiscal 2022):
- Net sales increased 7.6% to $7.5 billion, primarily driven by inflation and new business.
- Gross profit increased $54 million, or 5.2%, to nearly $1.1 billion; prior to LIFO, gross profit increased 6.1%.
- Net income decreased 13.2% to $66 million; Earnings per diluted share (EPS) decreased 14.4% to $1.07.
- Adjusted EBITDA increased 3.5% to $207 million.
- Adjusted EPS increased 2.7% to $1.13.
- Entered into commercial agreement to implement an industry-leading warehouse automation system.
“Our performance this quarter reflects continued execution of our strategy in a dynamic operating environment as we improved fill rates and operating performance and saw more customers buying more categories from us than ever before,” Sandy Douglas, UNFI’s chief executive officer, said in the announcement. “We are leveraging our scale, diversification, and capabilities to enhance connectivity between customers and suppliers, finding unique ways to create more value for both. We continued to invest in people and technology as part of our commitment to becoming a more effective, more efficient, and more disciplined business, well-positioned to capture a growing share of our $140 billion core addressable market and create even more value for shareholders.
“Looking ahead, our customer pipeline is robust, with new customer acquisition and expansion from existing customers expected in the second half of the year. We have enduring confidence in the opportunities before us and in our ability to capture them. We remain energized and focused on meeting the needs of our customers during the important holiday selling season, while delivering our fiscal 2023 guidance.”
First-quarter fiscal 2023 summary
Net sales increased 7.6% in the first quarter of fiscal 2023 compared to the same period last year, primarily driven by inflation and new business. This new business resulted from selling new or expanded categories to existing customers and adding new customers from its robust pipeline. These increases were partially offset by an expected decrease in unit volume consistent with the overall industry.
Gross profit in the first quarter of fiscal 2023 increased $54 million, or 5.2%, compared to the first quarter of fiscal 2022. Excluding the non-cash LIFO charge in both periods, gross profit increased $64 million, or 6.1%. The gross profit rate in the first quarter of fiscal 2023 was 14.6% of net sales and included a $21 million LIFO charge. Excluding this non-cash charge, gross profit rate was 14.8% of net sales. Gross profit rate in the first quarter of fiscal 2022 was 14.9% of net sales and included an $11 million LIFO charge. Excluding this non-cash charge, gross profit rate in the first quarter of fiscal 2022 was 15.0% of net sales. The decrease in gross profit rate, excluding the LIFO charge, was driven by changes in customer mix as we continued to grow sales with larger customers.
Net income for the first quarter of fiscal 2023 was $66 million. Net income for the first quarter of fiscal 2022 was $76 million.
Net income per diluted share (EPS) was $1.07 for the first quarter of fiscal 2023 compared to net income per diluted share of $1.25 for the first quarter of fiscal 2022. Adjusted EPS was $1.13 for the first quarter of fiscal 2023 compared to $1.10 in the first quarter of fiscal 2022.
Adjusted EBITDA for the first quarter of fiscal 2023 was $207 million compared to $200 million for the first quarter of fiscal 2022.