PROVIDENCE, R.I. (AP) — United Natural Foods' fiscal fourth-quarter net income rose 46 percent from year-ago results that were weighed down by restructuring charges. The food distributor's gross margin declined and its fiscal 2013 guidance was weaker than expected.
Shares of United Natural Foods Inc. dropped $4.80, or 7.9 percent, to $55.63 in midday trading Tuesday after sinking as low as $53.35 earlier in the session. Over the past year, the stock has traded in a range of $32.83 to $61.21.
United Natural also announced Tuesday that it plans to consolidate four existing distribution plants in Denver into a new facility in Aurora, Colo. No jobs are expected to be impacted by the consolidation.
The new plant is expected to start its operations next summer
For the three months ended July 28, the Providence, R.I.-based company earned $25.1 million, or 51 cents per share. That compares with $17.2 million, or 35 cents per share, a year earlier. The prior-year period included $6.3 million in expenses related to a division's restructuring.
The latest results met the expectations of analysts polled by FactSet.
Quarterly revenue increased 16 percent to $1.34 billion from $1.16 billion, topping Wall Street's estimate of $1.32 billion.
Fourth-quarter gross margin — a measure of profitability — fell, with the company citing purchasing and logistics inefficiencies and an ongoing shift by customers to lower margin conventional supermarkets and lower fuel surcharge revenues.
Cantor Fitzgerald's Ajay Jain said in a client note that United Natural's gross margin was surprisingly weak.
Full-year earnings climbed 19 percent to $91.3 million, or $1.86 per share, from $76.7 million, or $1.60 per share, in the previous year. Annual revenue rose 16 percent to $5.24 billion from $4.53 billion.
United Natural Foods anticipates fiscal 2013 earnings of about $2.14 to $2.24 per share on revenue of approximately $5.88 billion to $5.98 billion. Analysts forecast earnings of $2.24 per share on revenue of $5.83 billion.
Jain said that the full-year earnings forecast was disappointing, as United Natural will have one extra week in fiscal 2013.
The analyst maintained a "Sell" rating and $36 price target.