United Natural Foods Inc. (UNFI) surged over 15% after posting Q4 results which beat Wall Street’s expectations.
The grocery wholesaler reported a quarterly adjusted loss of 11 cents per share for the fourth quarter ended July 31, beating Wall Street expectations of a 19-cent loss.
The company reported loss of $1.43 per share, or $87 million, was higher than the previous year’s $37 million, or 63 cents per share, reflecting one-time costs related to a cyber incident earlier this year.
Revenue fell 5.6% to $7.70 billion, roughly in line with analysts’ forecasts of $7.64 billion.
Shares of UNFI rose sharply following the release, climbing 15.77% to $36.77, the stock’s 52 week high, extending gains that have seen the stock rise 33% year-to-date.
At the time of writing, the stock was trading at $36.51.
The performance underscores investor optimism following the company’s adjusted earnings beat, despite lingering operational challenges.
Impact of cyber incident on operations
The company cited a cyberattack in early June as a key factor in the quarter’s performance.
Chief Executive Sandy Douglas noted that the incident disrupted ordering and fulfillment processes, leading to temporary shortages at some grocery locations.
UNFI incurred $15 million in costs associated with managing and mitigating the incident.
Despite the disruption, Douglas emphasized that the company successfully navigated the situation in collaboration with customers and suppliers.
Analysts at Roth Capital Partners highlighted UNFI’s ability to manage the impact of the cyberattack while continuing to execute its three-year strategic plan.
Analyst ratings and market outlook
Analysts remain cautiously optimistic on UNFI’s prospects.
Of the 11 brokerages covering the stock, four rate it a “buy” or higher, while seven recommend a “hold.”
No “sell” ratings were reported. The median 12-month price target stands at $29, roughly 9.5% below the stock’s Monday close of $31.76, reflecting mixed sentiment despite the recent gains.
UNFI’s financial outlook for the coming fiscal year is moderately positive.
The company projects net sales of $31.6 billion to $32 billion in fiscal 2026, slightly below analysts’ forecast of $32.36 billion.
On an adjusted basis, UNFI anticipates earnings of $1.50 to $2.30 per share, translating to a full-year profit range of nil to $50 million.
Analysts surveyed by FactSet expect a profit of $49.9 million, or $1.49 per share, suggesting UNFI’s guidance is largely in line with market expectations.
Looking ahead
The fourth-quarter results reflect UNFI’s efforts to manage operational disruptions while maintaining revenue stability.
The company’s adjusted earnings beat and share gains signal investor confidence in its ability to navigate challenges and deliver on long-term growth initiatives.
Douglas reiterated that the company will continue focusing on accelerating momentum and providing customers with products, programs, services, and supply-chain solutions.
While risks remain from operational disruptions and market pressures, UNFI’s performance in the latest quarter shows resilience, with analysts noting that the stock’s year-to-date gains highlight continued market interest in its recovery and growth strategy.
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