"One of Howard Penney's recent SELL Ideas (Institutional Research Product) has been United Natural Foods (UNFI)," writes Hedgeye CEO Keith McCullough.
With the stock +2.2% here's both a SELL signal and an excerpt from his most recent research note:
"To quickly summarize the release, revenue came in at $2.29B vs FactSet $2.33B, EBITDA was in-line at $67.5M, adj. EPS was also in-line at $0.50.
Due in part to performance to date and expectations for the second half, management brought down guidance for the full year. Revenue guidance for the full year is now $9.38-9.46B vs prior guide of $9.43-9.60B and vs current consensus of $9.41B. Adj. EPS is expected to be in the range of $2.53-2.58 vs prior guidance of $2.53-2.63 and vs current consensus of $2.56.
Management also announced a restructuring, they will incur $3.5M to $4M in restructuring costs and eliminate or relocate roughly 265 positions a lot of which has to do with the consolidation of shared services. Management noted the bulk of the benefit would be realized in FY18.
Seldom do companies restructure when times are good, or the path ahead looks smooth. This is a smart management team, they see the tectonic shifts in the industry, and they know they have to prepare for the storm that is approaching."
