Why United Natural Foods Stock Popped Today

Shares of United Natural Foods (NYSE:UNFI) were looking fresh today, as the nation’s largest wholesaler of organic and natural foods posted better-than-expected results in its fourth-quarter earnings report, including a surprise profit.

As of 1:42 pm ET, the stock was up 22.1% on the news.

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United Natural Foods is looking healthy

United Natural Foods said revenue in the quarter was up 10% to $8.16 billion, which was better than the consensus at $7.94. That result benefited from an extra week in the calendar. On a comparable 13-week basis, net sales were up 2.1%.

Management said that improving trends, new business with existing customers, and efficiency initiatives all paid off in the quarter, and the improvement on the bottom line was noticeable. Adjusted earnings before interest, taxes, depreciation, and depreciation (EBITDA) was up 53.8% to $143 million, which included a $10 million benefit from the extra week.

On the bottom line, adjusted earnings per share improved from a loss of $0.25 in the quarter a year ago to a profit of $0.01, well ahead of expectations at a loss of $0.10 per share.

CFO Matteo Tarditi noted the better-than-expected results, saying, “This capped a year in which we generated four consecutive quarters of sequentially increasing profitability, significantly strengthened our foundation, and built momentum as we enter fiscal 2025.”

What’s next for United Natural Foods?

Looking ahead, United Natural Foods expects revenue of $30.3 billion-$30.8 billion, which is down 1.5% at the midpoint from its fiscal 2024 result, but basically flat when adjusting for the extra week in the calendar.

That range was slightly below the consensus at $30.89 billion. On the bottom line, it called for adjusted EPS of $0.20-$0.80, which compared to the consensus at $0.57.

While that forecast wasn’t as strong as you might expect given the surge in the stock, the business is moving in the right direction, and profitability is improving. That seemed to be enough to earn the beaten-down stock some applause from investors.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.