Photo courtesy of UNFI/Wild Harvest
Wholesaler United Natural Foods Inc. March 9 announced what the company called “historic” financial results for the second quarter of fiscal 2022. SSales rose 7.5% year over year to $7.4 billion, a quarterly record, in the 13-week fiscal quarter that ended Jan. 29. On a two-year stack, net sales increased 14.6%.
“Our second quarter sales were the highest in UNFI’s history, as our customers provided the products consumers were looking for for their winter vacations,” CEO Sandy Douglas said in a statement. “Despite accelerating inflation and supply chain issues, UNFI continues to remain nimble to provide the best possible service to our customers.”
For the quarter, net income increased 11.9% year over year to $66 million, while adjusted EBITDA decreased 2.4%. at $201 million. Adjusted earnings per share also fell to $1.13—a loss of 9.6%.
The company indicated that the gross margin rate in the second quarter of fiscal 2022 was 14.5% of net sales, compared to 14.42% of net sales for the second quarter of fiscal 2021.
UNFI said the increase in gross margin rate was due to improvement in wholesale segment margin rate, including the impact of inflation and the company’s ValuePath initiative, partially offset by changes in customer mix and higher LIFO load. Retailers’ gross margin rate increased slightly compared to last year.
Continuing its debt reduction efforts in the last quarter, UNFI reported reducing net debt outstanding by $67 million.
Despite persistent supply chain bottlenecks, the company forecasts net sales growth of 6% for fiscal 2022 and adjusted EBITDA growth of 4%.
“We are optimistic for the second half of the year as our Fuel the Future strategy continues to deliver real value and best position our customers to succeed in today’s unpredictable environment,” said Douglas. .
The company’s second quarter report follows two recently announced executive hires. UNFI has appointed Louis Martin, current president of Walmart’s global customer team for Coca-Cola, to the newly created role of chief strategy and transformation officer, effective March 21. The company has also appointed Matt Echols, former vice president of Coca-Cola, to the also newly created position of director of general affairs. Echols will oversee the Corporate Communications and Engagement, Public Policy, Government Relations, and Environment, Social and Governance (ESG) teams.
Also this week, UNFI said its Wild Harvest-owned brand, which includes more than 400 food products across all grocery categories, is getting a facelift with “a stronger focus on family, convenience and convenience. taste”.
At a time when dollar sales of private label products are at an all-time high, Amanda Helming, UNFI’s Director of Marketing, said, “Wild Harvest is recognized on shelves nationwide as a trusted choice. for consumers looking for a wider range of cleaner products and more conscious choices that are easier on their wallet but don’t compromise on taste or quality.”
The transition of existing and new products featuring the brand’s new look will take place across many categories over the next 18 months, UNFI said in a statement. The first revelation will take place at Western Natural Products Show 2022. Wild Harvest will introduce four new plant-based proteins: burger patties, hashes, meatballs and breakfast patties. The company said the new plant-based proteins are made with pea protein and non-GMO project-verified ingredients that are free of soy, gluten and palm oil.
“With a short ingredient list, desirable product features and a 5% to 10% lower price point than national brands, we are excited to be able to launch new items under a new design to modernize the brand and meet both retailers and consumers need a high-quality, more affordable alternative to national, plant-based meats,” Helming said.