By Melodie Warner
United Natural Foods Inc.'s fiscal second-quarter earnings rose 18% as a new contract helped boost the specialty-food distributor's sales.
The company lowered its full-year earnings estimate to $1.79 to $1.86 a share from its September forecast of $1.83 to $1.93 but raised its full-year sales estimate to between $5.11 billion and $5.17 billion from its prior estimate of $5 billion to $5.1 billion.
United Natural, which distributes natural, organic and specialty foods in the U.S. and Canada, has seen double-digit sales growth for nearly two years as it grabs more market share. But restructuring and acquisition charges, along with higher operating costs, have hurt its bottom line of late.
United Natural, which is the primary distributor to Whole Foods Market Inc. (WFM), signed a three-year distribution pact with Safeway Inc. (SWY) that became effective in October and had agreed in June to sell its non-foods and general merchandise business to L&R Distributors Inc., saying the products aren't strategic to its business....That is the way to build a company, expanding market share. Changing lifestyles are all a part of that paradigm shift. Expanding markets, helping consumers make better choices while offering different ways to think about meal time and preparation. Sugar and starch and everything cholesterol is out, healthy is in.
