United Natural Foods (NASDAQ:UNFI) may be a major supplier of organic and natural foods to various customers, and it's not hard to imagine why that might be a delicious proposition. However, does that extend to its stock right now?

Fiscal first-quarter earnings were impressive, growing 62% to $12.4 million, or $0.29 per share. Sales increased 12.3% to $646.4 million. For the most part, margins improved, although gross margin dipped a bit. If you check our Fool by Numbers for United Natural's first quarter, you'll see that not all was rosy. For example, take its balance sheet: Cash dropped 15%, and cash used in operations more than tripled on a year-over-year basis.

If you've been following United Natural Foods, you know that its Alberts Organics produce business in its Indiana facility has been a sticking point (last year's fourth-quarter Fool on Call touched upon the issues there), and in the first quarter, it still underperformed. United Natural announced its decision to shut down that portion of its Indiana facility and transfer those sales to its Minneapolis facility. The Indiana Alberts Organics issues are cited in the company's gross margin decrease for the quarter.

United Natural spoke optimistically about plenty of other factors in its conference call, including its opportunities with a major customer, Whole Foods Market (NASDAQ:WFMI). If you will recall, the two companies extended their agreement back in October, allowing United Natural to serve Whole Foods' southern Pacific region in the U.S. (Whole Foods accounts for 25.5% of United Natural's total business.) United Natural pointed out that Whole Foods' strong plans to open 18 to 20 new stores should help in the coming year.

While another major customer, Wild Oats (NASDAQ:OATS), has closed eight stores, resulting in about a $7 million hit to sales, United Natural said that the four new stores it's also opened are mitigating that negative pressure.

Meanwhile, United Natural's food-service segment struck me as an interesting channel with plenty of room for growth. Although providing wares to food-service establishments only represents 2.2% of its total business, food-service revenues were up 60% on a year-over-year basis. The company said that schools and universities have been the main drivers for this segment, with other schools as prospective customers. Other segments reported healthy gains, too, with sales to independents up 12%, supermarkets up 24%, and natural-foods supermarkets up 9.5%.

Clearly, United Natural will face some short-term challenges to cash flow and margins as the company builds for the long term. It's planning to build facilities in Portland, Ore., Florida, and Texas. These should save the company money over the long haul, cutting the fuel costs involved in transporting its foods, while expanding its sales opportunities. Nonetheless, the capital expenditures involved are expected to total $40 million to $45 million in the coming year, roughly double last year's amount.

United Natural Foods seems like a strong company in many regards. It's definitely benefiting from the growing popularity of natural and organic food offerings -- and relying heavily on continued consumer interest in that type of diet. The company's also known for its rather high multiples. While its short-term outlook may be a little bit rocky, especially as it doles out cash to build more facilities, it seems there's a lot of potential for the long haul, and good reason for potential investors to keep an eye on this company.

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Alyce Lomax does not own shares of any of the companies mentioned.