Have you seen those television shows that swap polar opposite mothers? I was watching one such show last night where a natural food nut was dropped in New Orleans in the middle of gator country. With no natural food sources for miles, the woman even ate fried alligator and liked it.
Fortunately for United Natural Foods
United Natural appears to be gaining some momentum, witnessed by its strong first-quarter results. The company reported 25% sales growth and 12% same-store sales growth (excluding Wild Oats); net sales of $477.5 million beat the consensus sales estimate by 3.1%.
The company's first-quarter earnings of $0.24 per share bested the analysts' consensus estimate of $0.23 per share and crushed last year's $0.17-per-share earnings by 41%. In addition to the strong growth numbers, United Natural produced a 26-basis-point operating margin improvement. The company said it excelled despite "the negative impact of the hurricanes we experienced in Florida, rising fuel prices and the impact of our decision to close our Mounds View, MN facility due to its small size."
United Natural recently announced plans to expand its Midwest operations. The expansion of a distribution facility in Greenwood, Ind., will serve as a Midwest hub for customers in Illinois, Indiana, Ohio, and other Midwest states. The company's 15 U.S. distribution centers (with an aggregate of 2.6 million square feet) house 35,000 products and serve its 18,000 customers.
Looking ahead, the company reaffirmed its revenue guidance of $1.9 to $2.0 billion for fiscal 2005 and bumped up its earnings forecast to $0.95 to $1.00 per share from its previous guidance of $0.93 to $0.97 per share.
United Natural shares, which are up 7% today, have appreciated more than 42% since August. This increase reflects investors' favorable reaction to many positive company trends. The shares are currently trading on target with the company's expected growth rate of 25% this year. Throw in its organic/internal expansion strategy and dominant position as a natural food distributor, and both investors and consumers appear to be in good shape.
Put down that Twinkie and digest these natural views:
Fool contributor Phil Wohl spent more than 12 years on Wall Street and does not own shares in any of the companies mentioned above.