NEW YORK (TheStreet) -- Shares of United Natural Foods (UNFI) - Get Report are plummeting 20.77% to $31.10 on heavy trading volume on Monday afternoon following the release of disappointing preliminary 2016 second quarter results.
For the second quarter, the Providence, RI-based natural and organic food producer forecasts adjusted earnings per diluted share between 47 cents and 49 cents on net sales of about $2.05 billion. Analysts are looking for earnings of 61 cents per share on revenue of $2.07 billion for the period.
The food distributor also cut its guidance for fiscal 2016 ending July 30. The company now expects adjusted earnings per share between $2.34 and $2.44 on sales in the range of $8.31 billion to $8.43 billion.
In December, United Natural projected adjusted earnings per share between $2.79 and $2.89 on sales of $8.43 billion to $8.59 billion, the Wall Street Journal noted.
Increased competition and a weaker Canadian dollar have pressured growth in recent quarters, the Journal added.
Additionally, the company said it has agreed to acquire rival grocery distributor Haddon House Food Products for $217.5 million, which will expand United Natural's ethnic and gourmet product categories.
United Natural, which is Whole Foods Market's (WFM) main supplier, is scheduled to release its full results on March 7.
About 5.93 million of the company's shares were traded by this afternoon, much higher than its average volume of 857,730 shares per day.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations.
As a counter to these strengths, the team also finds weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: UNFI