As United Natural Foods (NYSE: UNFI) prepares to issue its fiscal first-quarter 2020 earnings on Wednesday morning, it's clear that shareholders have never really warmed to its $2.8 billion acquisition of wholesale and retail grocer SUPERVALU in October 2018. On July 16, 2018, the day the deal was announced, shares of United Natural Foods (UNFI) slumped 16%. They've never regained ground, and in fact, they've shed 73% of their value from the announcement to date.
Investors' premonition that the merger would create operational challenges proved correct. By the second quarter of fiscal 2019, adjusted EBITDA of the combined company fell below expectations. UNFI recorded a $371 million charge against SUPERVALU's goodwill -- though it later revised the impact somewhat via $78 million in goodwill benefit adjustments in the following third and fourth quarters.
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