4 Factors That Make United Natural A Solid Pick In 2018

Initiatives to Improve Operating Efficiencies

United Natural has been striving to improve operational efficiencies and has made solid progress in this regard. The company is on track with restructuring plan to curtail expenses to achieve greater efficiency in a highly promotional environment. Moreover, in order to allocate resources diligently, the company has been exiting from less profitable businesses.

Solid Q1, Positive on the Road Ahead

The aforementioned growth initiatives helped United Naturals to retain its impressive earnings record in the first quarter of fiscal 2018.Both top and bottom lines improved year over year and surpassed estimates. While earnings marked its third straight beat, revenues crushed its 11-quarter long trend of reporting negative surprises. Solid focus on growth initiatives along with robust consumer demand in all channels fueled results. Evidently sales improved 7.9% year over year during the said period.

Management is impressed with the company’s stellar start in fiscal 2018. Additionally, the company continued to witness record sales and shipping unit volumes in the second quarter. Management believes that it is well placed for growth, considering consumers’ strong demand for United Natural’s better-for-you food products and services in all channels including retails stores, food service, e-commerce and international.

This encouraged management to raise its previously issued sales and earnings view for fiscal 2018. Management currently expects net sales for fiscal 2018 to grow in a range of 6.2-7.8% to $9.84-$10.0 billion. The company also envisions earnings in the range of $2.72-$2.80 per share, which reflects an improvement of about 6.3-9.4% from the fiscal 2017 figure.

All said, United Natural is expected to continue with sturdy performance on the back of dedicated efforts to tap growth opportunities.

Do Consumer Staples Stocks Grab Your Attention? Check These

Investors interested in the same sector may consider stocks such as Estee Lauder Companies Inc (EL - Free Report) , Conagra Brands Inc (CAG - Free Report) and Meredith Corporation (MDP - Free Report) , all carrying a Zacks Rank #2.

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