UNFI Boosts Sales Guidance

PROVIDENCE, R.I. — United Natural Foods Inc., here said Tuesday ongoing consumer interest in natural and organic foods prompted it to raise its sales guidance for the fiscal year that ends Aug. 3.

It now expects sales of between $6.03 billion and $6.06 billion — an increase over the previous range of $5.88 billion to $5.98 billion. The previous sales guidance already had taken into account the extra week in the current fiscal year, the company noted.

Steve Spinner

UNFI also said it plans to open three new distribution centers over the next few years to meet growing demand: one in Sturtevant, Wis., near Racine, that is scheduled to open next year; one in Montgomery, N.Y., in the Hudson Valley region, set to open in fiscal 2015; and one in Northern California, at a location not yet selected, though the company said it has narrowed its choice to two locations. It has already begun receiving merchandise at a new facility in Denver that will begin shipping product in early summer, Steve Spinner, president and chief executive officer, told analysts during a conference call to discuss financial results for the third quarter and nine months that ended April 27.

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Net income for the quarter rose 8.9% to $31.6 million, while sales increased 12.8% to $1.6 billion. For the year-to-date net income increased 14.5% to $75.8 million, while sales climbed 13.6% to $4.4 billion.

Gross margin for the quarter was 16.8%, up 7 basis points from the second quarter but down 83 basis points from the year-ago quarter — with the company attributing the decline to the continued shift in UNFI's customer mix to conventional and supermarket channels and an increase in inbound freight expenses.