DAYVILLE, Conn. -- Growing demand for natural and organic products resulted in a quarterly sales gain of 25.2% and a 50% increase in earnings for United Natural Foods here, the company said last week.
United reported earnings of $9.9 million, or 24 cents per share, on sales of $477.5 million for its fiscal first quarter ended Oct. 31. The company also raised its yearly earnings guidance from a range of 93 cents to 97 cents per share to 95 cents to $1, Steven Townsend, chief executive officer of United, said in a conference call last week.
The strong performance came despite a sales loss from one of United's retail stores, Sunsplash in Port Charlotte, Fla., which was heavily damaged by Hurricane Charlie in August, Townsend said. United also incurred costs relating to the closure of its Mounds View distribution center in Minnesota.
United recently began construction of a new 300,000-square-foot distribution center in Indiana, scheduled to open in July of 2005, Townsend added. The new facility will help relieve pressure on existing warehouses in New Oxford, Pa.; Iowa City, Iowa; and Atlanta, Townsend said.
Townsend added that he expected a new distribution contract with Austin, Texas-based retailer Whole Foods Market should be complete by the end of the year. Whole Foods is United's largest customer and accounted for 26% of its sales during the quarter.
Townsend said he expected that business from conventional supermarkets -- which accounted for 13% of United's sales during the quarter -- would continue to grow as those customers look to natural and organic products as a means of growing sales and differentiating themselves from Wal-Mart Stores, "who probably would not undertake a strategy like this in the near future."
