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Category: Stock Market and United Natural Foods
Date: 17 May 2020 Stock Price: $18.32 We take a look at the 3rd quarter earnings report of their 2020 fiscal year of United Natural Foods a premier food wholesaler delivering a wide variety of products to customers across North America.
We remain fully committed to keeping supermarket shelves across North America stocked and serving our customers and communities when they need us most, while prioritizing the safety of our teams who are working with exceptional dedication." |
About United Natural Foods
UNFI is North America's premier food wholesaler delivering the widest variety of products to customer locations throughout North America including natural product superstores, independent retailers, conventional supermarket chains, ecommerce retailers, and food service customers. By providing this deeper 'full-store' selection and compelling brands for every aisle, UNFI is uniquely positioned to deliver great food, more choices, and fresh thinking to customers everywhere. Combined with SUPERVALU, UNFI is the largest publicly-traded grocery distributor in America with expected annual sales of over $21 billion.
Overview of United Natural Foods' 3rd quarter 2020 earnings report
- Net sales: $6.668 billion (up from $5.963 billion for the same quarter of the previous year
- Revenue increased by 2% over the last 12 months
- Net income: $88 million (up from $57 million for the same quarter of the previous year)
- Net income increased by 54% over the last 12 months
- Net income increased by 54% over the last 12 months
- Diluted earnings per share: $1.60 (up from $1.12 for the same quarter of the previous year)
- Diluted earnings per share increased by 43% over the last 12 months
- Diluted earnings per share increased by 43% over the last 12 months
- Diluted weighted-average shares outstanding: 55 million (up from 50.9 million for the same quarter of the previous year)
- Adjusted EBITDA: $222 million (up from $168 million for the same quarter of the previous year)
- Adjusted EBITDA increased by 32% over the last 12 months
United Natural Foods' management commentary on their 3rd quarter 2020 earnings
PROVIDENCE, R.I., May 12, 2020 -- United Natural Foods, Inc. (NYSE: UNFI) (the “Company” or “UNFI”) today provided the following business update related to the COVID-19 pandemic, including announcing preliminary third quarter fiscal 2020 results and actions it is taking to protect and support its associates who are continuing to provide North America with essential services during this time of emergency
“I am incredibly proud of the entire UNFI team, especially our front line distribution center, transportation and retail associates, who have been working diligently to fulfill UNFI’s role as a critical link in the North American food supply chain during this unprecedented time. The safety of our team has always been and will continue to be at the forefront of everything we do,” said Steven L. Spinner, Chairman and Chief Executive Officer.
“Customer demand for both our natural and conventional products surged early in our fiscal third quarter and remains elevated, illustrating the value inherent in our strategy to build a distribution network capable of servicing natural, conventional and fresh perimeter products at scale. That demand, along with our ongoing synergy and integration initiatives, contributed to our strong preliminary third quarter results. We remain fully committed to keeping supermarket shelves across North America stocked and serving our customers and communities when they need us most, while prioritizing the safety of our teams who are working with exceptional dedication.”
The preliminary third quarter results include strong customer demand driven by responses to COVID-19, which has allowed UNFI to leverage fixed costs and capitalize on its synergy and integration efforts undertaken in connection with the Supervalu acquisition. These results also reflect increased contributions from the Cub and Shoppers retail banners as well as substantial incremental costs related to COVID-19, including the impact of temporary pandemic
“Customer demand for both our natural and conventional products surged early in our fiscal third quarter and remains elevated, illustrating the value inherent in our strategy to build a distribution network capable of servicing natural, conventional and fresh perimeter products at scale. That demand, along with our ongoing synergy and integration initiatives, contributed to our strong preliminary third quarter results. We remain fully committed to keeping supermarket shelves across North America stocked and serving our customers and communities when they need us most, while prioritizing the safety of our teams who are working with exceptional dedication.”
The preliminary third quarter results include strong customer demand driven by responses to COVID-19, which has allowed UNFI to leverage fixed costs and capitalize on its synergy and integration efforts undertaken in connection with the Supervalu acquisition. These results also reflect increased contributions from the Cub and Shoppers retail banners as well as substantial incremental costs related to COVID-19, including the impact of temporary pandemic
United Natural Foods (NYSE: UNFI) stock price history
The image below, obtained from Google, shows the stock price history of United Natural Foods (NYSE:UNFI) over the last 5 years. And it's been a horrible time for United Natural Foods stockholders. 5 years ago the stock was trading at around $67.80 and it is currently trading at $18.32 a stock. So over a 5 year period the stock of United Natural Foods declined by -72.9% .
The stock of United Natural Foods trading at closer to its 52 week high of $23.38 than it is to its 52 week low of $5, which to us is a clear indication that the short term sentiment and momentum towards United Natural Foods' stock is positive at this point in time.
The stock of United Natural Foods trading at closer to its 52 week high of $23.38 than it is to its 52 week low of $5, which to us is a clear indication that the short term sentiment and momentum towards United Natural Foods' stock is positive at this point in time.
Recent google search trends for UNFI stock price
The graphic below shows the trend in google searches for UNFI stock price over the last 12 months in the United States as obtained from Google Trends. And as it shows there is a fair bit of interest in the stock price of UNFI, all be it a little erractic.
Recent coverage of United Natural Foods
The extract below covers some of the most recent stock price movements of United Natural Foods (14 May 2020) as obtained from Fool.com
Shares of United Natural Foods (NYSE:UNFI) were giving back some of yesterday's gains while market averages headed lower as well. As of 11:30 a.m. EDT, the stock was down 17%. Yesterday, United Natural Foods stock finished a stunning 46% higher after reporting strong preliminary results for the third quarter of fiscal 2020.
So what
In this time of economic uncertainty, investors are seeking "safe" investments. As a food supplier for grocery stores, United Natural Foods is perceived as one of those havens. Not only did the stock pop yesterday, but shares hit fresh 52-week highs. Moreover, the stock had more than quadrupled from March lows. As United Natural Foods stock falls today, investors need to remember that nothing has changed with the business since yesterday. While shareholders don't like to see sharp drops, it's not surprising for the stock to give back some gains after its incredible recent run.
Shares of United Natural Foods (NYSE:UNFI) were giving back some of yesterday's gains while market averages headed lower as well. As of 11:30 a.m. EDT, the stock was down 17%. Yesterday, United Natural Foods stock finished a stunning 46% higher after reporting strong preliminary results for the third quarter of fiscal 2020.
So what
In this time of economic uncertainty, investors are seeking "safe" investments. As a food supplier for grocery stores, United Natural Foods is perceived as one of those havens. Not only did the stock pop yesterday, but shares hit fresh 52-week highs. Moreover, the stock had more than quadrupled from March lows. As United Natural Foods stock falls today, investors need to remember that nothing has changed with the business since yesterday. While shareholders don't like to see sharp drops, it's not surprising for the stock to give back some gains after its incredible recent run.
United Natural Foods (NYSE: UNFI) latest stock valuation
So what is United Natural Foods (NYSE: UNFI) stock worth based on the release of their latest earnings report? Based on their earnings report and the fiscal guidance provided our valuation models provide a target (full value) price for United Natural Foods of $25.60 a stock. We therefore believe that the stock is undervalued.
We usually suggest long term investors look to enter a stock at least 10% below our target (full value) price which in this case is $25.60. So a good entry point into United Natural Foods stock would be at $23 or below. Since the stock is trading at well below these levels we rate the stock of United Natural Foods as a buy.
We usually suggest long term investors look to enter a stock at least 10% below our target (full value) price which in this case is $25.60. So a good entry point into United Natural Foods stock would be at $23 or below. Since the stock is trading at well below these levels we rate the stock of United Natural Foods as a buy.
Next earnings release of United Natural Foods
It is expected that United Natural Foods will release their 4th quarter and full fiscal 2020 results towards mid August 2020