Shares of United Natural Foods (UNFI 20.02%) were soaring today after the leading wholesaler of organic and natural foods posted strong results in its fiscal first-quarter earnings report, beating estimates on the top and bottom lines.

As a result, the stock finished the day up 20%.

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UNFI is on the rebound

United Natural Foods (UNFI) has now more than tripled from its low in the spring as investments in increased efficiency and other initiatives are paying off.

In Q1, revenue increased 4.2% to $7.87 billion, easily beating estimates at $7.61 billion. Its supernatural segment, which currently consists of just Whole Foods, delivered strong growth with revenue up 13.8% to $1.84 billion. At its largest segment, chains, which consists of grocery banners with more than 10 locations, revenue rose 3.5% to $3.29 billion.

The business benefited from value initiatives that attracted increased spending from existing customers like Whole Foods, and it's also optimizing its distribution network, driving profitability improvements.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 14.5% to $134 million. On the bottom line, adjusted earnings per share (EPS) rose from a loss of $0.04 to a profit of $0.16, well ahead of the consensus at a loss of $0.01.

UNFI CEO Sandy Douglas said, 

Our performance this quarter represents a solid start to fiscal 2025 and serves as an early proof point of our recently introduced multi-year strategic plan predicated upon bringing value to our customers and suppliers while enhancing our efficiency, improving free cash flow and reducing net leverage.

What's next for UNFI

The food wholesaler also raised its guidance for the full year. It now sees revenue of $30.6 billion to $31 billion, which represents a 0.6% decline at the midpoint, and was up from its previous forecast of $30.3 billion to $30.8 billion.

It also raised its adjusted EPS forecast from $0.20 to $0.80 to $0.40 to $0.80, which compares to just $0.14 in the quarter a year ago.

The stock might look pricey based on that forecast, but there is a lot of room for improvement here and upside potential for this niche leader.