Shares of United Natural Foods are slipping 0.52% to $45.88 in mid-morning trading on Monday.
The firm lowered 2016 earnings estimates to $2.98 from $3.15 per share, reflecting the customer loss such as Costco Wholesale (COST) - Get Report and Kroger (KR) - Get Report, and a more conservative core growth rate of 8%.
"With a modest industry sales slowdown in recent quarters, the risk of further increased competition as well as regional suppliers remains a potential threat," BMO Capital analysts said.
United Natural Foods, based in Providence, RI, is a distributor of natural, organic and specialty foods and non-food products in the U.S. and Canada.
Separately, TheStreet Ratings team rates UNITED NATURAL FOODS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNITED NATURAL FOODS INC (UNFI) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 18.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- UNITED NATURAL FOODS INC has improved earnings per share by 13.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNITED NATURAL FOODS INC increased its bottom line by earning $2.52 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($2.86 versus $2.52).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 14.7% when compared to the same quarter one year prior, going from $36.39 million to $41.75 million.
- Net operating cash flow has significantly increased by 207.72% to $46.71 million when compared to the same quarter last year. In addition, UNITED NATURAL FOODS INC has also vastly surpassed the industry average cash flow growth rate of -22.06%.
- You can view the full analysis from the report here: UNFI Ratings Report