United Natural Foods Inc (NYSE:UNFI) reported worse-than-expected Q4 results and issued FY20 sales guidance below analyst estimates
United, based in Providence, Rhode Island, reported Tuesday, gross margin for the fourth quarter of fiscal 2019 was 12.83% of net sales compared to 14.50% of net sales for the fourth quarter of fiscal 2018.
The largest driver of the decline in the gross margin rate was the addition of SUPERVALU at a lower gross profit rate.
Operating expenses in the fourth quarter of fiscal 2019 were $776.9 million, or 12.13% of net sales, compared to $316.6 million, or 12.21% of net sales in the fourth quarter of fiscal 2018.
The decrease in operating expenses as a percent of net sales is driven by the addition of SUPERVALU at a lower operating expense rate and the benefit of cost synergies from the SUPERVALU acquisition, both of which were partially offset by higher depreciation and amortization expense.
Operating income was $66.3 million in the fourth quarter of fiscal 2019 and included the benefit from a goodwill and asset impairment adjustment of $39.9 million partially offset by restructuring, acquisition, and integration related expenses of $19.0 million.
When excluding these items, operating income was $45.4 million, or 0.71% of net sales, in the fourth quarter of fiscal 2019. Operating income in the fourth quarter of fiscal 2018 was $49.8 million and included restructuring charges and acquisition costs of $9.6 million.
Shares dropped $2.70, or 24.4%, to $8.38
