Profits and margins
Adjusted EPS rose 11% to $1.18, coming much ahead of analysts’ expectations. The company’s gross margin also improved to 14.91% from 14.84% last year, helped by improvements in the Wholesale segment margins. The retail gross margin rate remained approx. flat compared to last year.
Upbeat guidance
United Natural Foods expects FY2022 net sales to range between $27.8 billion and $28.3 billion, up 4% at the midpoint. Adjusted EPS is estimated to be $3.90-4.20, also up 4% at the midpoint. Analysts had projected net sales of $27.8 billion and adjusted EPS of $3.42. This better-than-expected outlook has impressed the Street.
Cross-selling
UNFI continues to see success from cross-selling and adding new customers. The company generated $80 million in revenue from cross-selling during the fourth quarter and over $700 million in FY2021. Selling more to existing customers represents a $38 billion addressable opportunity and with over 18,000 unique customers across 30,000 locations, UNFI sees significant growth potential in this space.
New products
Another one of UNFI’s growth strategies focuses on launching new products that match the changing needs of customers. The company launched around 100 new products in FY2021 and it plans to roll out another 150 items in FY2022. These will include more plant-based and functional ingredient SKUs. The company believes these new product offerings combined with its large customer base will help drive growth in FY2022.
Click here to read the full transcript of United Natural Foods Q4 2021 earnings conference call