NEW YORK (TheStreet) -- The rising popularity of organic and natural foods among consumers has been a boon for food distributor United Natural Foods (UNFI), which has grown annual revenue by some 300% just in the past decade. But that's history.
All that matters now is the company's poor performance. For that reason, the best course is to wait on investing.
In the past two quarters United Natural Foods has posted earnings that have fallen shy of Wall Street's estimates, with the stock getting punished as a result. Shares, which closed at $63, are down more than 4% in the past week, down over 16% in the past three months and down nearly 19% for the year to date.
If you're thinking about buying UNFI stock at this level, think again. The Providence, R.I., company has cut its business outlook for the rest of the year so the stock is likely to perform worse before it gets better.
Founded in 2006, United Natural Foods wants to lead a food distribution market that is currently fragmented. One of its goals is to emerge a leader in the natural, organic and specialty products wholesale distribution business -- one that serves large areas in U.S. and Canadian markets.
United Natural Foods has had plenty of success, growing revenue from around $2 billion in 2005 to a projected $8 billion for full-year 2015. All told, for almost a decade UNFI has been an important part of the food distribution business. But over the past year investors have starved for higher profits. That's something UNFI failed again to deliver when it reported Tuesday.