United Natural Foods, Inc. (UNFI – Free Report) has been investor’s preferred pick for quite some time, as evident from its solid bull run. This Zacks Rank #2 (Buy) stock has rallied 47.6% in the past six months, outperforming the industry’s decline of 1.7%.
United Natural has been riding on effective growth policies. Moreover, a favorable outlook for fiscal 2018 bolsters investor’s optimism on the stock. Let’s take a look into some the factors that have been aiding this leading food distributor’s performance and are likely to help it sustain the momentum.
Growth in E-commerce
Amongst management’s strategies to enhance performance, e-commerce expansion is a priority. To this end, United Natural strives to strengthen e-commerce space by investing in technology and infrastructure. Driven by such efforts, e-commerce sales jumped more than 30% in the first quarter of fiscal 2018, wherein the food service e-commerce sales recorded highest quarter of year-over-year growth. United Natural’s efforts to expand online operations encouraged management to project robust opportunities in this space, backed by impressive distribution network and solid brands portfolio.
Acquisitions: An important Growth Driver
The company has been carrying out various acquisitions over the years to enhance brand portfolio, distribution network, customer base and boost long-term growth. United Natural acquired Haddon House in May 2016 and Gourmet Guru in Aug 2016, which have been contributing to sales. The Gourmet Guru deal helped the company in finding and cultivating emerging fresh and organic brands. It also expanded United Natural’s presence in key urban markets. United Natural’s acquisition of Haddon House Food Products provided greater operating scale and resources to develop product and service offering.
Other strides in this regard include United Natural’s buyout of Nor-Cal Produce, Inc (in 2016), Tony’s Fine Foods (in 2014) and Trudeau Distributing Company (in 2013) among many others.
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