Why United Natural Foods Stock Is Up Today

Actions of United Natural Foods (UNFI 30.56%) 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 looks healthy

United Natural Foods said revenue for the quarter rose 10% to $8.16 billion, which beat the consensus estimate of $7.94. This result benefited from an extra week on the calendar. On a comparable 13-week basis, net sales increased 2.1%.

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

Bottom line, adjusted earnings per share improved from a loss of $0.25 in the year-ago quarter to a profit of $0.01, well above expectations, to 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 sequential profitability growth, significantly strengthened our foundation and built momentum as we enter fiscal year 2025″.

What’s next for United Natural Foods?

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

This range was slightly below the consensus of $30.89 billion. Bottom line, it called for adjusted EPS of $0.20-$0.80, compared to the consensus of $0.57.

While this forecast wasn’t as strong as you’d expect, given the stock’s growth, the business is moving in the right direction and profitability is improving. That seemed to be enough to win investor applause for the knocked-down stock.