United Natural Foods shares rise after 4Q report

Shares of United Natural Foods Inc. jumped Wednesday after the food distributor reported a slight dip in fourth-quarter earnings and said it expects its profit to rise for the full 2009 fiscal year.

Its stock advanced 83 cents, or 4.4 percent, to $19.58. The shares have traded between $15.60 and $31.87 over the past 12 months, and are off about 38 percent since the start of the year.

Before the market opened, United Natural Foods said its quarterly profit fell 2 percent, mainly due to higher operating expenses. High fuel costs as well as costs associated with relocating to a new distribution facility in California and building another facility in Pennsylvania.

The result matched Wall Street's predictions, according to a poll of analysts by Thomson Reuters.

Citi Investment Research analyst Gregory Badishkanian said in a note to investors he was "pleased" the company's profit met expectations "given the high commodity cost environment and weakness in the economy."

Food makers, distributors and sellers have all struggled to deal with higher commodity costs. Most have had to raise retail prices or cut other operating expenses to offset the costs. Meanwhile, consumers have become more cautious in terms of how much they spend due to high gas prices and the weak housing market.

Sales at the company were a bright spot, rising 29 percent and besting Wall Street analysts' expectations.

Badishkanian, who has a "Buy" rating on the stock with a $22 price target, said the sales growth was "encouraging given the tough consumer environment and soft same-store sales," or sales at stores open at least a year, at Whole Foods. Whole Foods is one of United Foods' biggest customers.

The company also provided 2009 guidance, saying it expects profit to rise to between $1.30 and $1.38 per share from $1.13 per share in 2008.