A disappointing second quarter earnings sheet has United Natural Foods revising its fiscal year 2024 forecast.
Net sales decreased 0.5% year over year to $7.8 billion primarily driven by a decline in unit volumes, which was partially offset by inflation and new business with existing customers.
Gross profit for the second quarter was down 3.2% year over year, or $34 million, at $1 billion.
Net loss was $15 million while operating expenses in the second quarter came in at $1.01 million, which is a slight increase compared to Q2 2023.
Adjusted EBITDA was $128 million; in the second quarter of 2023 it was $181 million.
As a result of the soft performance in Q2 UNFI has revised its projections for fiscal year 2024. Net sales were originally set at $30.9 billion to $31.5 billion but have been set back to $30.5 billion from??? $31 billion. Adjusted EPS was $450 million to $550 million for the year but is now $475 million to $525 million.
“Our second quarter results reflect our continued focus and progress on execution and profitability improvement through the important holiday selling season. Greater than anticipated benefits from our near-term value creation initiatives and further advances in managing shrink partially offset the expected reduction in procurement gains and start-up costs associated with a new distribution center,” said Sandy Douglas, UNFI’s Chief Executive Officer.
“We are making steady progress on the multiple work-streams underlying both our near-term and longer-term transformation into a more efficient and effective partner to our customers, while we also enhance profitability and long-term shareholder value creation.”
In late January UNFI announced it would have an AI-powered robotic automation system in its Manchester, Pa., distribution center, which is expected to open this summer.
The system, manufactured by Symbotic, is the second installation for UNFI and is part of the company’s goal to further enhance the effectiveness and efficiency of its distribution center network. The first AI automation system is currently being deployed at UNFI’s Centralia, Wash., distribution center and is on track to become operational in the first half of 2024.
