UNFI - Why Shares of United Natural Foods Slumped This Week
2023-09-28 13:40:52 ET
Shares of grocery and non-food distributor United Natural Foods (NYSE: UNFI) were down by 25% this week as of midday Thursday, in the wake of a highly disappointing fiscal fourth-quarter 2023 report and weak guidance for its fiscal 2024.
Its loss of $68 million for the quarter that ended July 29 was bad enough (it helped reduce the company's full-year net income to just $24 million), but management's guidance for a net loss in fiscal 2024 in the range of $36 million to $110 million was even worse.
It's not uncommon for food distributors to have wafer-thin margins, and United does. Because of that, relatively minor issues can dramatically impact its profit. Discussing the company's ongoing issues on the earnings call , CEO James Douglas cited the enduring impact on costs of taking longer than expected in "modernizing and unifying our technology and network platforms." Douglas noted that the pandemic lockdowns, supply chain issues, and, more recently, inflation had negatively impacted the company's efforts on this front.
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Why Shares of United Natural Foods Slumped This Week