UNFI Announces Preliminary 3rd Q Results, COVID-19 Business Update

Providence, RI—United Natural Foods, Inc. (UNFI) has announced preliminary third quarter results, bundled in with a COVID-19 business update and an announcement of the actions the company is taking to protect the health and safety of its associates and to care for local communities.

Steven L. Spinner, Chairman and CEO of UNFI, summarized in a press release: “Customer demand for both our natural and conventional products surged early in our fiscal third quarter and remains elevated, illustrating the value inherent in our strategy to build a distribution network capable of servicing natural, conventional and fresh perimeter products at scale. That demand, along with our ongoing synergy and integration initiatives, contributed to our strong preliminary third quarter results. We remain fully committed to keeping supermarket shelves across North America stocked and serving our customers and communities when they need us most, while prioritizing the safety of our teams who are working with exceptional dedication.”

The third quarter of UNFI’s fiscal year 2020 ended May 2, 2020. The company expects to be able to report the following approximate financial results:

  • Net sales of ~$6.668 million, compared to $5.963 million in the third quarter 2019;
  • Net income of ~$88 million, compared to $57 million in the third quarter 2019;
  • Adjusted EBITDA of ~$222 million, compared to $168 million in the third quarter 2019;
  • Earnings per diluted share of $1.60, compared with $1.12 in the third quarter 2019.

The results, the press release says, include strong consumer demand driven by the COVID-19 pandemic, as well as increased contributions from the Cub and Shoppers retail banners as well as substantial incremental costs related to COVID-19, including the impact of pandemic-related incentives and additional costs for safety protocols and procedures.

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UNFI reduced outstanding net debt by approximately $290 million, bringing it down to $2.68 billion.

The company will be updating its full year guidance when it reports official third quarter results in early June, based on the strength of its fiscal 2020 year-to-date financial performance.

When it comes to protecting and supporting its employees, the press release says that UNFI was one of the first companies to adopt the $2 per hour Temporary State of Emergency Bonus. UNFI has provided attendance flexibility, allowing associates to stay home when ill and to take care of family members without fear of losing their jobs. Over 2,000 new associates were hired in March and April.

UNFI has also implemented enhanced on-site sanitation practices, social distancing practices, and drop-and-go protocols for drivers arriving at retail stores. UNFI has engaged professional cleaning companies in company facilities, requires associates to wear face coverings, and is covering COVID-19 testing expenses and providing grants to associates experiencing COVID-19-related financial hardship.

In order to help support communities, UNFI has committed over $1 million to philanthropic organizations including Feeding America, Meals on Wheels, No Kid Hungry, and in support of communities in Rhode Island and Minnesota. The company has also donated over three million pounds of food and essential items to food banks across the country.

“I am incredibly proud of the entire UNFI team, especially our front line distribution center, transportation and retail associates, who have been working diligently to fulfill UNFI’s role as a critical link in the North American food supply chain during this unprecedented time,” said Spinner in the press release. “The safety of our team has always been and will continue to be at the forefront of everything we do.”