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What to Note Ahead of United Natural (UNFI) in Q3 Earnings

United Natural Foods, Inc. UNFI is likely to register top-line growth when it releases third-quarter fiscal 2023 earnings on Jun 7. However, the bottom is likely to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $7,524 million, suggesting a rise of 3.9% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings has declined 1.6% in the past 30 days to 63 cents per share, indicating a 42.7% decline from the figure reported in the prior-year quarter. The food company has a trailing four-quarter negative earnings surprise of 7.6% on average. UNFI reported a negative earnings surprise of 43.5% in the last reported quarter.

Things to Note

United Natural has been witnessing a challenging operating landscape due to inflation, supply-chain issues and changing consumer preferences. On its fiscal second-quarter earnings call, management predicted its profitability to remain challenged throughout the year as it continued to lap periods of considerable procurement gains. The persistence of such hurdles might have been a headwind in the quarter to be reported.

Also, rising sales and operating expenses have been a concern for the company over time. For instance, in second-quarter fiscal 2023, its operating expenses increased 5.8% year over year, while the metric jumped 6.7% in the first six months of fiscal 2023. Also, the impacts of changes in labor and raw material costs might have harmed its margin and profitability in the to-be-reported quarter.

Given its extensive regional presence, United Natural’s operations are subject to global economic and political risks, as well as forex woes. A stronger U.S. dollar might have hurt the company's overseas business in the fiscal third quarter.

However, the company is benefiting from its e-commerce strength thanks to the increased digital solutions it offers. The company is focused on rolling out additional marketing and analytics capabilities to improve customers’ brand experiences. These upsides are likely to have contributed to the company’s quarterly performance.

United Natural has also been benefiting from its Fuel the Future strategy, unveiled in June 2021. Management’s focus on increasing the market share via network optimization, solid innovation and a better customer experience are likely to have been tailwinds.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for United Natural this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

United Natural currently carries a Zacks Rank #5 (Strong Sell).

United Natural Foods, Inc. Price and EPS Surprise

 

United Natural Foods, Inc. Price and EPS Surprise
United Natural Foods, Inc. Price and EPS Surprise

United Natural Foods, Inc. price-eps-surprise | United Natural Foods, Inc. Quote

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UNFI has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are three companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Kraft Heinz Company KHC currently has an Earnings ESP of +0.38%. The company is likely to register top- and bottom-line increases when it reports its upcoming quarter results. The consensus mark for KHC’s quarterly revenues is pegged at $6.84 billion, which suggests growth of 4.3% from the figure reported in the prior-year quarter.

KHC currently sports a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Kraft Heinz’s earnings per share has moved from 74 cents to 75 cents in the past 30 days.

The Hershey Company HSY currently has an Earnings ESP of +0.92% and a Zacks Rank #3. The company is likely to register growth in its top and bottom lines when it reports its upcoming quarter numbers. The consensus mark for its quarterly earnings has moved down 0.5% in the past 30 days to $1.90 per share.

The Zacks Consensus Estimate for HSY's quarterly revenues is pegged at $2.5 billion, which suggests an increase of 6.8% from the figure reported in the prior-year quarter.

Archer Daniels Midland Company ADM currently has an Earnings ESP of +1.95% and a Zacks Rank #3. The company is likely to register top- and bottom-line declines when it reports its upcoming quarterly results. The consensus mark for ADM’s quarterly revenues is pegged at $24.9 billion, which suggests an 8.9% fall from the figure reported in the prior-year quarter.

The consensus mark for ADM’s quarterly earnings has declined in the past 30 days to $1.54 cents per share. The consensus estimate suggests a decline of 28.4% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Hershey Company (The) (HSY) : Free Stock Analysis Report

Archer Daniels Midland Company (ADM) : Free Stock Analysis Report

United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report

Kraft Heinz Company (KHC) : Free Stock Analysis Report

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