United Natural Foods (UNFI) Tops Q2 EPS by 16c, Beats on Revenues; Boosts FY18 EPS/Revenue Outlook Above Consensus

United Natural Foods (NASDAQ: UNFI) reported Q2 EPS of $0.71, $0.16 better than the analyst estimate of $0.55. Revenue for the quarter came in at $2.53 billion versus the consensus estimate of $2.45 billion.

Second Quarter Fiscal 2018 Highlights

• Net sales increased 10.6% to $2.53 billion compared to $2.29 billion for the same period last fiscal year
• Earnings per diluted common share increased $0.49 to $0.99 from $0.50 for the same period last fiscal year; Adjusted earnings per diluted common share was $0.71, excluding a provisional one-time benefit related to U.S. tax reform and restructuring and impairment charges
• Operating income decreased $6.1 million, or 13.1%, to $40.2 million compared to $46.3 million for the same period last fiscal year; Adjusted operating income, excluding restructuring and impairment charges, increased $5.2 million, or 11.2%, to $51.4 million
• Company raises fiscal 2018 guidance

Fiscal 2018 Guidance

Based on UNFI’s performance to date, the impact of tax reform contemplated by the Tax Act and the outlook for the remainder of fiscal 2018, the Company is raising its guidance previously provided on December 7, 2017. For fiscal 2018, ending July 28, 2018, the Company now estimates net sales in the range of approximately $10.01 billion to $10.16 billion, an increase of 8.0% to 9.5% over fiscal 2017 net sales, compared to the previous estimate of $9.84 billion to $10.00 billion. The Company now estimates earnings per diluted common share for fiscal 2018 in the range of approximately $3.27 to $3.35, an increase of approximately 27.7% to 30.9% over fiscal 2017 earnings per diluted common share of $2.56, compared to the previous estimate of $2.72 to $2.80. Adjusting for restructuring and impairment charges and the impact of the one-time tax benefit related to the remeasurement of U.S. net deferred tax liabilities resulting from U.S. tax reform, the Company estimates adjusted earnings per diluted common share for fiscal 2018 in the range of approximately $3.06 to $3.14, an increase of approximately 19.5% to 22.7% over fiscal 2017 earnings per diluted common share. The estimated GAAP and adjusted earnings per diluted common share outlook reflect the ongoing estimated benefits from the Tax Act. On a GAAP basis, the Company estimates its effective tax rate to be in the range of 23.8% to 24.3% and its adjusted effective tax rate to be in the range of 33.0% to 33.3%, compared to previous guidance of 40.0% to 40.3%. Capital expenditures for fiscal 2018 are expected to be 0.6% to 0.7% of estimated fiscal 2018 net sales.

GUIDANCE:

United Natural Foods sees FY2018 EPS of $3.27-$3.35, versus the consensus of $2.94. United Natural Foods sees FY2018 revenue of $10.01-10.16 billion, versus the consensus of $9.92 billion.

For earnings history and earnings-related data on United Natural Foods (UNFI) click here.

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