United Natural Foods (NASDAQ: UNFI) stock gained 20% last month, according to data provided by S&P Global Market Intelligence.
Continue Reading Below
The rally helped shareholders recover some lost ground, but the organic food distributor is still trailing the market by a wide margin in 2017.
September's surge followed a surprisingly strong quarterly earnings announcement. Highlights from the fiscal fourth quarter included rising sales and earnings, with United Natural Foods' revenue improving by 6%, and higher profitability as grocery price deflation became less of a drag on the business. Recent acquisitions, including Haddon House Food Products and Gourmet Guru, helped the company end its fiscal year on a positive note.
CEO Steven Spinner and his executive team are optimistic that they can extend the business rebound despite the highly competitive industry conditions. Their fiscal 2018 forecast calls for continued modest growth, with sales rising by between 3.8% and 5.8%, and earnings ranging from $2.67 per share to $2.77 per share, which translates into gains of between 4.3% and 8.2%.
That prediction implies no major disruption with its relationship with Whole Foods -- its single biggest customer -- despite that chain's acquisition by Amazon. That hint of optimism was enough to help shares recover a small fraction of the ground they've lost since early 2015.
10 stocks we like better than United Natural FoodsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and United Natural Foods wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of September 5, 2017