United Natural Foods, Inc. (UNFI) tumbled almost 25% to $14.95 in early afternoon trading Friday after the organic and specialty foods distributor reported disappointing first quarter results.
The Providence, Rhode Island-based company posted a net loss of $19.3 million or 38 cents per share, compared with earnings of $30.5 million, or 60 cents per share a year ago. Adjusted earnings for the latest quarter totaled 59 cents per share.
The company reported revenue of $2.87 billion in the period, beating Wall Street expectations of $2.69 billion.
In October, United Natural Foods completed its $2.9 billion acquisition of fellow food wholesaler Supervalu Inc. The company said restructuring, acquisition, and integration related expenses in the first quarter of fiscal 2019 came to $68 million.
"While we are clearly disappointed by the near-term results of Supervalue," Steve Spinner, chairman and CEO, said in a call with analysts, "we started this process with a viewpoint that in order to build the business for the future and to create considerable value for our constituents, UNFI would serve its shareholders over the long term by becoming the premier wholesaler of products and services throughout North America."
Spinner said the company is facing several near-term issues, including the macroeconomic environment of retail, which he said "continues to be challenging, more and more retailers competing for their share of the consumers' dollar."
"Products are now available in more and more outlets, including online," Spinner said. "We expect the scale, the product offering and the services of a combined UNFI to offset this trend as we start to realize the benefits of the combination."
Spinner also said that Supervalue's performance, where trends have weakened, caused the company to reset near-term expectations. In addition, Spinner said higher labor costs and productivity issues related to the holiday season and the addition of temporary labor.
United Natural said expects full-year earnings in the range of $1.69 to $1.89 per share, with revenue in the range of $21.5 billion to $22 billion.