United Natural Foods stock plunged toward a 1 1/2-year low after big earnings miss and lowered full-year outlook

Shares of United Natural Foods Inc.
UNFI,
-0.92%
plunged 20.8% toward a 19-month low in premarket trading Wednesday after the grocery wholesaler reported fiscal second-quarter profit that missed by a wide margin, as “rapidly accelerating inflation” took a bite out of results. Net income for the quarter to Jan. 29 fell to $19 million, 31 cents a share, from $66 million, or $1.08 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 78 cents was well below the FactSet consensus of $1.45. Sales grew 5.4% to $7.82 billion, above the FactSet consensus of $7.77 billion. Cost of sales rose more than sales, up 6.4% to $6.75 billion, as gross margin contracted to 13.7% from 14.5%. “While I’m pleased with our continued sales growth, profitability in the quarter was lower than recent levels and our plan,” said Chief Executive Sandy Douglas. “Profits were challenged as we did not repeat the significant level of procurement gains from rapidly accelerating inflation and inventory gains, due to supply chain volatility, that we experienced in the second quarter of last year.” The company slashed its fiscal 2023 guidance range for adjusted EPS $3.05 to $3.90 from $4.85 to $5.15, but raised its sales outlook to $30.1 billion to $30.5 billion from $29.8 billion to $30.4 billion. The stock has gained 6.4% over the past three months through Tuesday while the S&P 500
SPX,
-1.53%
has edged up 0.6%.