United Natural Foods
Shares of United Natural Foods, Inc. (UNFI, Financial) fell more than 16% Wednesday morning after reporting fiscal third quarter revenue of $6.67 billion and earnings per share of $1.40. The results fell short of analyst’s EPS estimates by 1 cent, though revenue was in-line with predictions.
CEO Steven L. Spinner had the following to say:
"UNFI's ability to successfully manage the strong increase in customer demand driven by the COVID-19 pandemic is a testament to the dedication of our associates, our strong industry position, and the critical role we play in the North American food supply chain. We expect elevated consumer demand for our wide variety of natural, conventional and fresh perimeter products, along with our ongoing synergy and integration initiatives, to result in a strong finish to the fiscal year. I am so proud of our team of front line associates who continue to amaze us with their commitment to excellence. Our firstpriority will continue to be their safety."
In the quarter, net sales rose 11.9% year-over-year due to a strong demand driven by responses to Covid-19.
The gross margin rate reached 12.85%, down from 13.22% for the same quarter of fiscal 2019. The decrease was fueled by a mix shift toward lower margin conventional products and lower levels of vendor funding.
The company made efforts to lower operating expenses, which totaled $774.4 million for the quarter (11.61% of net sales) compared to $737.7 million (12.37% of net sales) for the third quarter of the prior year. Those efforts were made in administrative expenses and synergy and integration efforts.
The operating income was $71.7 million and included $10.4 million of restructuring, acquisition and integration related expenses.The adjusted Ebitda was $222.2 million compared to $168.2 million for the prior-year quarter.
Looking ahead to full fiscal 2020, the company expects net sales in the range of $26.4 million to $26.6 million. It also projects a loss per share between $5.85 and $5.65, with adjusted Ebitda between $655 and $670 million.
In the first quarter of calendar 2020, Jim Simons' Renaissance Technologies cut its holding in the company by 95% to 50,912 shares and Mario Gabelli (Trades, Portfolio) cut his investment by 12% to 78,000 shares. Paul Tudor Jones (Trades, Portfolio) sold out of the stock. Joel Greenblatt (Trades, Portfolio) initiated a new position worth 10,752 shares.
Chewy
Shares of Chewy, Inc. (CHWY, Financial) gained 1% in Wednesday morning trading after reporting first quarter revenue of $1.62 billion and a loss per share of 12 cents. The company beat analysts' revenue projects by $90 million and EPS projections by 5 cents.
“We had a strong start to 2020 with first quarter net sales increasing 46 percent year-over-year and gross margins expanding 50 basis points. We also achieved a significant milestone by delivering our first ever quarter of positive adjusted EBITDA,” commented the company's CEO, Sumit Singh.
The gross margin inched up 50 basis points to 23.4% year-over-year, while the net margin declined 30 basis points to -3.0%. Adjusted Ebitda more than doubled to $3.4 million, while the adjusted Ebitda margin rose 160 basis points to 0.2%.
Steven Cohen (Trades, Portfolio) added 85% to his position in the company for a total of 382,224 shares. Paul Tudor Jones (Trades, Portfolio) initiated a new position worth 33,318 shares, while Andreas Halvorsen (Trades, Portfolio) sold out the stock.
(Disclosure: The author holds no position in any stocks mentioned).
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