Shares of United Natural Foods (NASDAQ:UNFI) are sinking today. They were down 17% as of 11 a.m. EST.
The food wholesaler reported its fiscal first-quarter 2021 earnings this morning that didn't meet analyst expectations on the top or bottom lines.
United Natural Foods said it lost $0.02 per share including pre-tax charges and costs, and missed analyst estimates with adjusted earnings per share (EPS) of $0.51 after removing restructuring, acquisition, and integration related expenses. Analysts expected comparable earnings of $0.74 per share.
The company also slightly missed revenue estimates, even with what it called "strong customer demand." Grocers and other consumer staples businesses have been reporting strong sales throughout the pandemic.
United Natural did report better profit margins compared to the prior-year period. But even in the strong business environment, the company adjusted fiscal 2021 estimates downward for net income and EPS, while increasing its capital expenditure plans.
The additional $50 million in spending is related to an investment in a new distribution center "to service a major new customer" and to position the company for growth in the New York metropolitan area, it said.
The drop in shares today reflects investors taking profits after the stock has soared since the start of the year. Strength in the grocery business helped shares more than double in 2020 prior to today's fall. After such a strong run, lowering the outlook for earnings convinced some investors to move on.