PROVIDENCE, R.I.--(BUSINESS WIRE)--Dec. 7, 2015-- United Natural Foods, Inc. today reported financial results for the first quarter of fiscal 2016 ended October 31, 2015 and updated its fiscal 2016 guidance.
First Quarter Fiscal 2016 Highlights
- Net sales increased 4.2% to $2.08 billion compared to $1.99 billion for the same period last fiscal year. Excluding the year-over-year impact of the previously disclosed termination of a customer distribution contract, adjusted net sales increased 6.8% compared to the first quarter of fiscal 2015.
- Operating income decreased 7.7% to $53.9 million compared to $58.4 million for the same period last fiscal year; adjusted for $2.8 million of restructuring costs in the first quarter of fiscal 2016, adjusted operating income decreased $1.7 million, or 2.9%, from the same period last fiscal year.
- Operating income for the first quarter of fiscal 2016 was negatively impacted by $1.8 million of bad debt expense related to a customer bankruptcy.
- Diluted EPS was $0.60 compared to $0.66 for the same period last fiscal year; adjusted for $2.8 million of restructuring costs in the first quarter of fiscal 2016, adjusted diluted EPS was $0.63.
“Our first quarter financial results reflect an evolving marketplace for natural and organic foods. As consumers demand healthier options, rapid adoption of natural and organic products across sales channels has increased the competitive nature of our industry,” said Steven Spinner, President and Chief Executive Officer. “Despite these headwinds, our customers have demonstrated their continued confidence in UNFI through contract extensions valued at over $785 million per year, in addition to a modification and extension of our contract with Whole Foods Market until 2025. This, combined with opportunities in gourmet and ethnic products as well as fresh foods, represents tremendous incremental long-term growth opportunities for UNFI as we focus on our mission to connect farms to families by delivering healthier food options to more people every day.”
Net sales for the first quarter of fiscal 2016 increased 4.2%, or $84.2 million, to $2.08 billion from $1.99 billion in the first quarter of fiscal 2015. Excluding the year-over-year impact of the termination of a customer distribution contract, adjusted net sales increased 6.8% compared to the first quarter of fiscal 2015. Gross margin decreased 89 basis points to 15.1% for the first quarter of fiscal 2016 compared to 16.0% for the same period last year. The decrease in gross margin was primarily due to the unfavorable impact of foreign exchange for the Company's Canadian business, a reduction in fuel surcharges, moderated supplier promotional activity, and a shift in the mix of sales towards lower margin sales channels. Full report.
