United Natural Foods’ (UNFI) Q3 2017 Results

Steve Spinner – Chairman & CEO

Same store sales under pressure

“Same-store sales at many of our retail customers were under pressure or negative during the quarter. Our retail customers are facing competitive pressure not only from other food retailers, but also from many channels now carrying assortment of better for you products.”

Deflation being experienced

“We continue to experience deflation…This was an improvement from the second quarter; however, reflects a headwind compared to the year ago period when we had inflation of 1.25%.The general lack of inflation also caused what we believe to be a short-term pressure on gross margin dollars…Deflation has continued but is moderated.”

Retailers facing growth headwinds

“…when you look at general same-store sales year-over-year, quarter-over-quarter, many of the retailers across most of the channels are facing some real headwinds in terms of growth. And as part of that, we’ve seen certainly a fair number of store closing as retailers are coming together and so in the near term that’s been a real headwind for us, but inflation will return.”

Michael Zechmeister – CFO

Lack of inflation is a headwind

“In the third quarter fiscal 2017, we experienced deflation of approximately 17 basis points excluding the impact of the recently converted Haddon House warehouses. The result was a slight improvement versus the second quarter of this year, but the lack of historic levels of inflation continues to be a headwind to our net sales growth and to our margins.”