Below is a brief note from CEO Keith McCullough on why we're adding United Natural Foods (UNFI) to the short side of Investing Ideas today:
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Here's another name that has bounced recently on decelerating volume post a fundamental blowup: United Natural Foods (UNFI). And here's how Howard Penney and Shayne Laidlaw explained that blowup in a recent @Hedgeye Institutional Research note: "We just witnessed a complete breakdown of UNFI. The break down came in many places: 1. The management team 2. The income statement 3. The balance sheet and cash flow statements The break down from the management team came at the end of the earnings call when they were finally put to the test about the new guidance and the Q3 accounting change. Yesterday, the center of the controversy was a non-cash accounting change for the accrual for inventory purchases which benefited gross margin by 78bps and EPS by $0.27 in Q3." Sell the bounce, KM |