UNITED NATURAL FOODS: SALES NEAR $2 BILLION

DAYVILLE, Conn. -- Favorable trends in the natural/organic segment will produce sales approaching $2 billion for United Natural Foods here, the company said last week.

by 24% to 25%. Gross margins will be in the low to mid-19% range, the company added.

However, the expected earnings of 93 to 97 cents per share (on sales of $1.9 billion to $2 billion) came in slightly below analyst estimates of $1 per share. Increased medical costs would cost the company around 2 cents per share, United said.

"It's not tragic news -- growth will be around 25% instead of 28%," Andrew Wolf, an analyst for BB&T Capital Markets, Richmond, Va., told SN, adding that the company had indicated its medical costs would rise during a conference call last month.

United said it would spend between $35 million and $38 million during the fiscal year on new facilities and technology. It expects to spend $100 million to $125 million overall over the next three years. According to Wolf, distribution centers in Texas and/or Florida are likely goals.

"We are benefiting from favorable trends in the natural products industry and we will look to take advantage of historically low interest rates by scheduling several capital projects that reflect the ongoing strength in our business," said Steven Townsend, United's chief executive officer, in a statement.