PROVIDENCE, R.I. (AP) — United Natural Foods posted a 42 percent spike in first-quarter net income as strong sales offset shortages of some products.
The company matched Wall Street profit expectations, but slimmer margins may have spooked some investors and shares dipped in a broader market sell-off.
"Despite moderated inflation and higher than anticipated product shortages, strong consumer demand continued to drive steady growth for our products and services during the quarter," said Steven Spinner, President and Chief Executive Officer. "We anticipate growth for the holiday season should remain strong as consumers continue to move towards a healthier lifestyle."
For the fiscal quarter which ended on Oct. 27, the company earned $21.5 million, or 43 cents per share, compared with $15.2 million, or 31 cents per share, a year earlier. Adjusted to exclude some one-time items, United Natural said it would have earned 46 cents per share in the most recent quarter, matching the average expectation of analysts polled by FactSet.
Revenue rose 16 percent to $1.41 billion, just edging out Wall Street expectations.
Suppliers, however, ran out of stock at a faster rate than United Natural expected and freight costs increased, cutting into profits. Gross margin was 16.7 percent a 110 basis point decline from gross margin of 17.8 percent during the same period last year.
Shares of United Natural Foods Inc. fell 52 cents to $51.55 in midday trading.