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United Natural Foods, Inc. (NYSE:UNFI) is slated to release second-quarter fiscal 2020 results on Mar 11. The provider of natural, organic and specialty food, and non-food products has trailing four-quarter positive earnings surprise of 6.7%, on average.
The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 27 cents per share, which indicates a 38.6% decline from the year-ago quarter’s reported figure. Nevertheless, the consensus mark has moved up by a couple of cents in the past 30 days. The Zacks Consensus Estimate for revenues is pegged at $6,156 million, which suggests a 0.1% improvement from the year-ago quarter’s reported figure.
Key Factors to Note
United Natural has been struggling with reduced gross margin for a while now. The inclusion of SUPERVALU, with lower gross margin, has been keeping the metric under pressure. Also, gross margin has been affected by a shift in the consumer mix. Moreover, challenges at several distribution centers due to headwinds such as store closures have been threatening.
Nevertheless, United Natural has been benefiting from strong brands and rising consumer demand across various channels. Additionally, contributions from SUPERVALU (acquired in October 2018) have been driving the company’s top line for a while now. Moreover, United Natural has been gaining from the focus on enhancing the customer base and expanding the broad-line distribution channel. Also, the company’s cost-saving efforts bode well.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for United Natural this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
United Natural carries a Zacks Rank #5 (Strong Sell) but an Earnings ESP of +4.67%.
Stocks With Favorable Combination
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.
DICK'S Sporting (NYSE:DKS) has an Earnings ESP of +5.16% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Casey's General (NASDAQ:CASY) currently has an Earnings ESP of + 3.45% and a Zacks Rank #3.
RH (NYSE:RH) presently has an Earnings ESP of +1.61% and a Zacks Rank #3.
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