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UNFI reports strong Q3, delays Cub Foods sale

United Natural Foods, Inc. BB #:158953 reported a 12 percent third quarter sales growth over last year’s same period in its third quarter financial report.

However, UNFI announced plans to continue to operate the Cub Foods banner and some of its Shoppers Food Warehouse stores for up to two years.

Steve Spinner, Chairman and CEO of UNFI, explained the Cub Foods decision on a conference call.

“Last month, given the state of the M&A markets, I said we’ll likely be running some Shoppers stores for an additional period of time, and that same thinking applies to Cub,” Spinner said.

“As an interim step, we’re in the process of separating Cubs from UNFI, which means Cub will operate more as a freestanding entity than it does today with its own dedicated resources once the separation is complete. Historically, we’ve supported Cub with shared resources that include associates splitting their time between Cub and other parts of the business. This should accelerate the diligence period and allow for a more streamlined process when we market these banners for sale.”

Highlights of the Q3 report include:

  • Net Sales increased 12% to $6.67 billion compared to $5.96 billion in last year’s fiscal third quarter
  • Net income increased 54% to $88 million; Adjusted EBITDA increased 32% to $222 million
  • Earnings per diluted share (EPS) of $1.60; Adjusted EPS increased 130% to $1.40
  • Net debt reduced by $302 million compared to the second quarter of fiscal 2020
  • Updates fiscal 2020 guidance, which includes the impact of Retail included in Continuing Operations

 

Greg Johnson is Director of Media Development for Blue Book Services