United Natural Foods Stock Jumps on Distribution Agreement

The wholesaler stock is already up nearly 100% year-to-date

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United Natural Foods, Inc. (NYSE:UNFI) is the largest publicly traded wholesale distributor in the United States and Canada. The company, together with its subsidiaries, distributes natural, organic, specialty, produce, and conventional grocery and non-food products. UNFI serves chains, independent retailers, and supernatural chains, as well as foodservice, e-commerce, conventional military business, and other sales customers.

On March 4, United Natural Foods announced that the company was extending its wholesale grocery distribution agreements with Whole Foods Market, a subsidiary of Amazon.com (AMZN), through September of 2027. The news comes just one week before UNFI is due to report on its fiscal second quarter. United Natural Foods is scheduled to release its quarterly financial results before the open on Wednesday, March 10. This afternoon, UNFI was last seen up 0.8% to trade at $32.04.

Taking a quick look back, UNFI has managed to beat expectations on three of its last four earnings reports. For the second quarter of 2020, United Natural Foods stock beat analyst estimates by a margin of $0.05 and reported an earnings per share (EPS) of $0.32. For the third quarter of 2020, UNFI increased its EPS massively to $1.40 and beat expectations by a margin of $0.26. For the final quarter of 2020, United Natural Foods posted a decrease in earnings. UNFI reported an EPS of $1.06, but still beat expectations by a margin of $0.32. In its most recent quarterly report, United Natural Foods reported an EPS of $0.51 and missed expectations by $0.23.

United Natural Foods stock has experienced incredible growth over the past 12 months. UNFI stock price has increased well over 500% since hitting its record low of $5.00 exactly one year ago, and is currently trading up 87% year-to-date. In fact, the security saw a nice bounce off the supportive 30-day moving average at the end of February.

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From a fundamental point of view, UNFI has some very interesting figures to dissect. United Natural Foods stock currently trades at a price-earnings ratio of 15.72 and has a forward price-earnings ratio of 8.24. In addition, the company has increased revenues by nearly 200% since 2017. United Natural Foods also added over $5 billion in sales between fiscal 2019 and fiscal 2020, bringing its total annual revenue to $26.5 billion.

Also worth mentioning, short interest on UNFI dropped more than 11% during the past two reporting periods, and now accounts for a hefty 23.6% of the stock's total available float. At the food giant's average pace of daily trading, it would take short sellers more than 12 days to buy back their bearish bets.

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