fruits on glass top display counter

United Natural Foods (NYSE:UNFI) share price rose 23.7% yesterday after a strong earnings report for their fourth quarter. Earnings were $1.18 per share, beating estimates of $0.80 per share. They have had new leadership in place for the fiscal year 2021 and have progressed well under their “Fuel the Future” growth strategy.

UNFI reported net sales of $27B for its fiscal year ending July 31, a 1.5% increase. Adjusted EBITDA was up by nearly 11% and net income reached $149M. Gross margin improved slightly from 14.84% to 14.91%

United Natural Foods, Inc

The company is the biggest supplier to whole foods (with their traffic making up over a third of its revenue in 2018) and delivers to 30,000 other grocery and supermarket stores. It is the largest publicly traded wholesale distributor of health and specialty food in the United States and Canada.

New CEO Sandy Douglas said in a statement, “I see significant opportunity to accelerate the value we create with and for our customers as well as the opportunity to make our operations more effective and efficient, both leading to continued profitable growth within our estimated $140 billion addressable market.”

Outlook

Investors believed the bottom line results were good. But the rise in price will have factored in the positive outlook for 2022. UNFI projects net sales for its FY2022 to range between $27.8B and $28.3B, a 4% increase over the FY2021 at its midpoint. Net income is set to rise by 56%, an estimate of $221-$243M. The company also looks set to reduce capital expenditures by $300M.

The stock has an all-time high of $83.91. The price currently is at $46.98. $52-$56 will see some resistance as the price has struggled to beat this previously after seeing some selling pressure at this level. Above this price and I think United Natural Foods could see a push to all-time highs in the coming months.

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