UPDATE: United Natural Foods Q2 Earnings Misses Expectations, Shares Tumble After-Hours

Shares of

declined more than 7% in after-hours trading after the company reported weaker-than-expected earnings for the fiscal second quarter and cut its full-year guidance. The Providence, Rhode Island-based company posted quarterly net earnings of $27.84 million, or $0.55 per share, compared to $27.95 million, or $0.56 per share, in the year-ago period. Excluding non-recurring items, the company's adjusted earnings came in at $0.65 per share in the quarter. Its sales gained 22.5% to $2.02 billion. However, analysts were expecting a profit of $0.65 per share on revenue of $2.02 billion. Operating income rose 1.3% to $49.5 million from $48.8 million, while adjusted operating income surged 17.2% to $57.2 million in the quarter. Gross margin narrowed 145 basis points to 14.8% for the quarter, while total operating expenses dropped 94 basis points to 12.4% as a percentage of net sales. "In the second quarter fiscal 2015 UNFI surpassed $2.0 billion in quarterly net sales for the first time in its history, continuing to demonstrate strong demand for our products and services. We also faced several challenges during the quarter highlighted by weakness in the Canadian dollar and a non-recurring reduction to net sales associated with a contractual obligation to a customer that we identified and brought to their attention. Despite these challenges we delivered on an adjusted basis operating income growth of over 17% during the quarter and 21% year to date," said Steven Spinner, President and Chief Executive Officer. For the full fiscal year, United Natural Foods now projects GAAP net earnings of $2.81 to $2.90 per share, versus prior forecast of $2.88 to $3.01 per share. It projects adjusted EPS of $2.90 to $2.99 per share. The company now expects revenue of $8.19 billion to $8.29 billion, versus earlier outlook of $8.13 billion to $8.38 billion. United Natural Foods shares fell 7.95% to $75.00 in after-hours trading.