United Natural Foods(US:UNFI)2022-12-07 21:31Financial Performance - Net sales for the first quarter of fiscal 2023 increased by 7.6% to $7,532 million, up from $6,997 million in the first quarter of fiscal 2022, driven by inflation and new business[124] - Gross profit rose by $54 million, or 5.2%, to $1,096 million, with a gross profit margin of 14.6%, down from 14.9% in the prior year[129] - Operating income decreased by $8 million to $99 million, primarily due to rising operating expenses outpacing gross profit growth[131] - Net income attributable to United Natural Foods, Inc. was $66 million, or $1.07 per diluted share, compared to $76 million, or $1.25 per diluted share, in the previous year[134] - Adjusted EBITDA for the first quarter of fiscal 2023 was $207 million, an increase of $7 million from $200 million in the same period last year[122] - Wholesale net sales increased by $525 million to $7,259 million, while retail net sales rose by $11 million to $613 million[136] Operating Expenses - Operating expenses increased by $68 million, or 7.3%, to $1,000 million, maintaining a consistent percentage of net sales at 13.3%[130] - The company experienced increased labor expenses due to a tight labor market, impacting operational costs[99] - The effective tax rate for the first quarter of fiscal 2023 was 6.9%, compared to a benefit rate of 1.3% in the prior year[133] - Interest expense decreased to $35 million from $40 million, primarily due to lower outstanding debt balances[132] Capital and Liquidity - Total liquidity as of October 29, 2022 was $1,289 million, consisting of $1,250 million unused credit under the ABL Credit Facility and $39 million in cash and cash equivalents[144] - Total debt increased by $376 million to $2,499 million as of October 29, 2022, primarily due to additional borrowings under the ABL Credit Facility[144] - Working capital increased by $415 million to $1,795 million as of October 29, 2022, driven by seasonal increases in inventory and accounts receivable[144] - Capital expenditures for the first quarter of fiscal 2023 were $67 million, an increase of $11 million compared to $56 million in the same period of fiscal 2022[151] - Fiscal 2023 capital spending is expected to be approximately $350 million, focusing on automating and expanding the distribution network[151] Cash Flow - Net cash used in operating activities for the first quarter of fiscal 2023 was $(262) million, an increase of $181 million compared to $(81) million in the first quarter of fiscal 2022[152] - Net cash provided by financing activities increased by $152 million to $319 million in the first quarter of fiscal 2023 compared to $167 million in the same period of fiscal 2022[154] Business Operations - The company operates 76 retail grocery stores, including 54 Cub Foods and 22 Shoppers Food Warehouse stores[104] - The company has a distribution center network with 56 centers and approximately 30 million square feet of warehouse space[93] - The company aims to capitalize on its unique position in the food distribution industry to drive customer growth and efficiency[96] - The company expects to continue investing in its retail segment to enhance customer and associate experiences through technology and operational tools[105] - The company plans to utilize available capital to reinvest in business growth and reduce outstanding debt[95] - The company’s Allentown, Pennsylvania distribution center began operations with a capacity of 1.3 million square feet, incurring start-up costs and operating losses[103] Shareholder Activities - In the first quarter of fiscal 2023, the company repurchased approximately 0.4 million shares of common stock for a total cost of $12 million under the 2022 Repurchase Program[161] Pension Contributions - The company expects to contribute approximately $51 million to multiemployer pension plans in fiscal 2023, subject to collective bargaining outcomes[158] Product Costs - The company reported a product cost inflation of approximately 10% in Q1 of fiscal 2023 compared to Q1 of fiscal 2022[106]