Reuters: Global Markets: United Natural Foods expects profit below estimates; shares dip

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United Natural Foods expects profit below estimates; shares dip Sep 11th 2012, 15:14 Tue Sep 11, 2012 11:14am EDT (Reuters) - Organic and specialty food distributor United Natural Foods Inc (UNFI.O) forecast lower-than-expected earnings for fiscal 2013 after inefficient purchasing and logistics management squeezed quarterly margins. The company's shares, which have gained more than half their value this year, fell as much as 12 percent to $53.35 on Tuesday morning. They were among the top percentage losers on the Nasdaq. United Natural Foods expects full-year earnings of between $2.14 and $2.24 per share. Analysts on average were expecting a profit of $2.25 per share, according to Thomson Reuters I/B/E/S. The company said disruption in the initial phase of a new transportation management system designed to manage its in-bound supply chain hit the fourth quarter, United Natural said on a conference call with analysts. "The low-end of guidance reflects the impact of a protracted strike at the (Auburn) facility - which would involve several one-time costs - including the hiring of replacement workers," BMO Capital Markets analyst Karen Short wrote in a note. Members of the Teamsters union, who are employed as drivers and warehouse workers at United Natural Foods' Auburn, Washington distribution center went on strike on Monday after rejecting the company's final proposal on wage negotiations. Fourth-quarter profit rose to 51 cents per share, in line with analysts' expectations. Gross margins fell 1.37 percentage points to 17.2 percent in the quarter. The company on Tuesday said it plans to consolidate its four existing Denver-based distribution facilities into one facility located in Aurora, Colorado to cut operating costs. "The company will incur duplicate rent for the duration of fiscal 2013 relating to this consolidation - and we estimate the impact could be in the 7 cents range," analyst Short said. (Reporting by Ranjita Ganesan in Bangalore; Editing by Supriya Kurane) Link this Share this Digg this Email Reprints

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