LONDON, UK / ACCESSWIRE / June 26, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on United Natural Foods, Inc. (NASDAQ: UNFI), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=UNFI, following the Company's announcement of its United Natural Foods, Inc. (UNFII) (NASDAQ: UNFI). The Company posted its third quarter fiscal 2017 financial results on June 06, 2017. The organic and specialty foods distributor exceeded earnings expectations and also reported its lowest leverage in the past three years. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the third quarter of fiscal 2017 ended April 29, 2017, UNFI's net sales increased 11.1% to $2.37 billion compared to $2.13 billion in Q3 FY16. The Company's net sales were positively impacted by the acquisitions of Haddon House Food Products, Inc., Global Organic/Specialty Source, Inc., Nor-Cal Produce, Inc., and Gourmet Guru, Inc. UNFI's sales were lower than analysts' expectations of $2.42 billion

For Q3 FY16, UNFI's gross margin totaled 15.46%, reflecting a 34-basis point improvement on a y-o-y basis, driven by acquisitions and margin improvement initiatives. The Company's total operating expenses increased to $301.4 million for the reported quarter compared to $256.4 million in the prior year's same quarter. Total operating expenses were 12.72% of net sales for Q3 FY17 which represented an increase of 69 basis points compared to the year ago corresponding period.

During Q3 FY17, UNFI reported a 1.6% drop in operating income to $64.9 million compared with $66.0 million for Q33 FY16. The Company's adjusted operating income increased 2.9% to $68.9 million in the reported quarter compared to adjusted operating income of $66.9 million for the prior year's same quarter. UNFI's EBITDA for Q3 FY17 was $86.4 million, reflecting an increase of 2.7% from $84.1 million in Q3 FY16. The Company's adjusted EBITDA for the reported quarter totaled $90.4 million, up 6.3% compared to adjusted EBITDA of $85.0 million in the year earlier comparable quarter.

UNFI's net income for Q3 FY17 fell 4.4% to $36.6 million from $38.3 million for Q3 FY16. On a per share basis, the Company's earnings declined 5.2% to $0.72 per diluted share compared to $0.76 per diluted common share for the year earlier quarter. UNFI's earnings adjusted for the impact of restructuring expenses totaled $0.77 per diluted share, flat compared to adjusted earnings per diluted common share of $0.77 per diluted share in the prior year's same period. The Company's earnings surpassed Wall Street's expectations of $0.76 per share.

Cash Flow

During Q3 FY17, UNFI's cash flow from operations was $66.2 million and capital expenditures were $17.3 million, resulting in free cash flow of $48.9 million compared to cash flow from operations of $81.0 million and capital expenditures of $8.6 million, resulting in free cash flow of $72.4 million for Q3 FY16. At the end of the reported quarter, the Company's debt-to-EBITDA leverage, excluding operating leases, was 1.51x which equals to its lowest leverage over the past 3 years.

Kicking Horse Coffee Stake Sale

On May 24, 2017, UNFI divested its stake in Kicking Horse Coffee, a Canadian roaster and marketer of organic and fair-trade coffee. As a result of sales, the Company expects to recognize a gain of $6.1 million, before taxes, in Q4 FY17.

Restructuring Extension

During Q4 FY17, UNFI expects to incur additional restructuring charges of between $3.0 million and $4.0 million, before taxes. These expenses are primarily related to severance and other employee separation costs driven by integration activities on several acquired businesses. These actions are in addition to the initiative announced on March 08, 2017, which resulted in the recognition of restructuring charges of $3.9 million, before taxes, during Q3 FY17.

Guidance

Based on UNFI's performance to date and the current outlook for the remainder of fiscal 2017, the Company revised its guidance. For the fiscal year ending July 29, 2017, UNFI is forecasting net sales in the range of approximately $9.29 billion to $9.34 billion compared to previous guidance of $9.38 billion to $9.46 billion. The Company's earnings guidance remained unchanged from the previously announced band of $2.48-$2.54 per diluted share. UNFI expects its FY17 tax rate to be in the range of 39.3% to 39.6% compared to previous guidance of 39.7% to 40.1%.

Stock Performance

On Friday, June 23, 2017, United Natural Foods' stock closed the trading session at $34.60, slightly falling 0.75% from its previous closing price of $34.86. A total volume of 1.29 million shares were exchanged during the session, which was above the 3-month average volume of 965.91 thousand shares. Shares of the Company have a PE ratio of 13.92 and currently have a market cap of $1.75 billion.

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