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United Natural Foods Inc UNFI
Q3 2013 Earnings Call Transcript

Transcript Call Date 05/28/2013

Operator: Greetings and welcome to the United Natural Foods Third Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Katie Turner of ICR. Thank you. Ms. Turner, you may now begin.

Katie Turner - IR: Thank you, and good morning, everyone. By now, you should all have access to the third quarter fiscal 2013 earnings press release issued this afternoon at approximately 4.05 pm Eastern Time. If anyone still needs to review the release, please reference the Investors section of the website at www.unfi.com. As a reminder, the webcast of the earnings call is also available on the Company’s website.

On the call today are Steve Spinner, President and Chief Executive Officer and Mark Shamber, Chief Financial Officer. Before we begin, we would like to remind everyone comments made by management during today’s call may contain forward-looking statements. These forward-looking statements discuss plans, expectations, estimates, and projections that might involve significant risks and uncertainties. Actual results may differ materially from the results discussed in these forward-looking statements.

Additionally, in today's press release and during the call, the Company will provide both GAAP and non-GAAP financial measures, including operating expenses, operating income, net income and earnings per diluted share. Presentation of these non-GAAP financial measures is not intended to be considered in isolation or in substitute for any measure prepared in accordance with GAAP. For a complete reconciliation of GAAP to non-GAAP financial measures, please refer to the Company's earnings release issued earlier today, available on the Company's website, under Investors.

With that, I'd like to turn the call over to Steve Spinner.

Steven L. Spinner - President and CEO: Thanks, Katie. Good afternoon, everyone and thank you for joining us today to discuss UNFI's financial results for the third quarter and first nine months of the fiscal 2013.

Our consistent solid financial performance demonstrates the demand for UNFI's products and services continues to grow and highlights our focus on improving efficiency and draw any further operational excellence across our business.

In the first nine months of this fiscal year, our net sales grew almost 14%. And sales during the third quarter grew almost 13% when comparing to the same period last year again reflecting a dynamic and expanding organic natural and specialty industry.

Our operating profit adjusted for our Auburn labor action grew almost 14% in the quarter versus the same period last year and our operating margin expanded by 4 basis points.

For the year our net income has increased 14.5% versus prior year. Two important notes we have now lapped the onboarding of Safeway and inflation was again very modest at approximately 2%.

Interestingly the year-over-year inflation spread is now at its greatest gap as inflation in Q3 2012 was 4% a 200 basis points difference. This further accentuates the strength in our sales growth, our consistent top line growth, reflects consumer demand being driven by more and more people maintaining healthier life styles with a growing interest in natural, organic and specialty products, food safety and environmental awareness. According to industry data published by SPINS, last year natural and organic products continued to outpace overall store growth across all channels. We expect this trend to continue for the foreseeable future.

Read our Earnings Call Transcript disclaimer.
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