United Natural Foods (UNFI) experienced a significant decline in its stock price as it missed revenue estimates and gave a profit guidance well below expectations in its recent FQ4 report. CEO Sandy Douglas attributed the decline in profitability to a decrease in inflation-driven procurement gains and elevated shrink. Looking ahead, UNFI provided a sales forecast of $30.9 billion to $31.5 billion for 2024, falling short of the $31.0 billion consensus, and an EPS range of -$0.88 to -$0.38 compared to the $2.28 consensus. The company also announced new board additions and a financial review to enhance its performance and drive shareholder value creation. As a result, shares of UNFI plummeted 19.98% in premarket trading, reaching a new 52-week low of $15.14.
The disappointing FQ4 report and profit guidance from UNFI caused a sharp drop in the company’s stock price. Despite an increase in sales across all customer channels, profitability decreased due to a decline in inflation-driven procurement gains and heightened shrink. CEO Sandy Douglas warned of further challenges as the company continues to cycle through elevated inflationary benefits in the first half of fiscal 2024. UNFI’s outlook for 2024 also fell short of expectations, with projected sales of $30.9 billion to $31.5 billion and EPS in the range of -$0.88 to -$0.38. Adjusted EBITDA guidance of $450 million to $550 million also disappointed compared to the consensus of $617 million. To address these issues and boost performance, UNFI announced new board additions and initiated a financial review.
As a result of the disappointing financial results and outlook, UNFI’s stock tumbled 19.98% in premarket trading, hitting a new 52-week low of $15.14. The company’s focus has shifted towards accelerating its transformation and positioning itself for both short-term and long-term success. UNFI aims to enhance its performance and drive shareholder value creation through the financial review overseen by the newly appointed board members. The market response to the news reflects investors’ concerns about UNFI’s ability to navigate the challenges related to procurement gains, inflation, and profitability.