BUSINESS NEWS: UNFI Reports Second Quarter 2010 Earnings

United Natural Foods has reported second quarter fiscal 2010 earnings. For more on this story, check out the upcoming issue of ihr magazine.

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UNFI Reports Second Quarter Fiscal 2010 Diluted Earnings Per Share of $0.36
AN INCREASE OF 13.9% OVER THE PRIOR YEAR PERIOD
PROVIDENCE, R.I., March 2, 2010 /PRNewswire via COMTEX/ -- Second Quarter 2010 Highlights

* Net sales increased 6.0% to $898 million over net sales for the second quarter of fiscal 2009
* Net income increased 15% to $15.7 million versus prior year comparable quarter

First Half Fiscal 2010 Highlights

* Diluted EPS increased 14.3% to $0.72 compared with $0.63 in comparable fiscal 2009 period
* Net sales increased 4.2% to $1.78 billion
* Net Income increased 16.1% versus prior year to $31.2 million

United Natural Foods, Inc. (Nasdaq: UNFI) today reported that net income for the second quarter of fiscal 2010 ended January 30, 2010 increased $2.1 million, or 15.0%, to $15.7 million, or $0.36 per diluted share, from $13.6 million, or $0.32 per diluted share, for the second quarter of fiscal 2009. Net sales for the second quarter of fiscal 2010 were $898.2 million, an increase of 6.0%, or $50.6 million, from net sales of $847.6 million recorded in the second quarter of fiscal 2009.

"The second quarter of fiscal year 2010 marks another period of solid revenues and profitability for UNFI," said Steven Spinner, President and Chief Executive Officer. "Improving sales trends have provided us with a solid level of top-line growth as we continue to work to gain market share and incremental business. UNFI has been awarded approximately $100 million in annual new business during the last six months, which is expected to phase in throughout fiscal 2010. As we begin the second half of fiscal 2010, I look forward to continued revenue growth throughout our company."

Gross margin was 18.5% for the second quarter of fiscal 2010, which represents a 0.6% decline from the gross margin of 19.1% for the second quarter of fiscal 2009. The lower gross margin compared to the prior year's comparable period was largely due to a combination of lower fuel surcharge revenues, a shift in customer mix and moderated inflation.

Operating expenses as a percentage of net sales decreased by 0.6% during the second quarter of fiscal 2010 when compared to the second quarter of 2009 to 15.5% of net sales, or $139.0 million versus 16.1% in the prior year. Operating expenses were positively impacted by lower fuel costs and the continued implementation of expense control programs across all UNFI divisions. The Company recorded $0.7 million in expenses during the quarter related to severance for a previously announced separation agreement and start-up costs associated with on-boarding of new customers.

First Half 2010 Summary

Sales for the first half of 2010 were $1.78 billion, a 4.2% increase over the prior fiscal year comparable period. Diluted EPS was $0.72 per share, a 14.3% increase over prior year. At 15.5% of net sales, operating expenses were 78 basis points lower than prior year. Gross margin was 68 basis points less than prior year, at 18.6% of net sales for the first six months of fiscal 2010.

"UNFI will continue to enhance its national leadership position in the natural, organic and specialty foods channel," said Mr. Spinner. "Our strategy to increase market share, drive operational excellence, operate as one company and further our sustainability and philanthropic causes will serve as the primary vehicle for success over the long term."

SOURCE: United Natural Foods Press Release