What happened

Shares of United Natural Foods (UNFI 0.75%) were tumbling today after the natural-foods wholesaler posted disappointing results in its third-quarter earnings report. The company was up against difficult comparisons from a year ago, when grocery sales spiked during the COVID-19 lockdown.

As of 12:22 p.m. EDT today, the stock was down 18.8%.

The produce section of a supermarket.

Image source: Getty Images.

So what

Revenue in the quarter fell 5.9%, but was up 6.7% on a two-year basis, to $6.62 billion. That result missed the analyst consensus at $6.8 billion.

Further down the income statement, results were also worse than a year ago, but still better than the third quarter of 2019. Gross margin slipped from 34 basis points to 14.6%, and adjusted EBITDA fell 19% to $179 million. On the bottom line, adjusted earnings per share fell from $1.33 to $0.94, though that still beat analyst estimates at $0.88 and was well above the $0.61 it reported in the quarter two years ago.

CEO Steven Spinner said: "Our results reflect our unrelenting focus on efficiency and the profitability of our business, as we cycled the highest spikes of sales revenue from pantry loading in the prior-year quarter. We continue to focus on helping our customers operate their businesses and meet the needs of their shoppers through our differentiated business model."

Now what

The weaker performance shouldn't be surprising given the difficult comparisons as the "pantry loading" that Spinner referred to was a fleeting phenomenon. Even with today's sell-off, United Natural Foods stock has still more than doubled, indicating that the performance improvements were already priced in.

Looking ahead, the company maintained its guidance for the full year, calling for $27 billion to $27.8 billion in revenue and adjusted earnings per share of $3.05 to $3.55. Based on that forecast, the company is now trading for a price-to-earnings ratio of just around 10, making it an appealing value stock in today's market.