Yahoo Finance United Natural Foods' (UNFI) Deal With Symbotic to Aid Growth
United Natural Foods, Inc. UNFI inked a deal with Symbotic Inc. SYM to use the latter’s A.I.-powered robotics and software automation across five of its distribution centers over the next four years. United Natural Foods can also use Symbotic’s warehouse automation systems in other distribution centers as part of the deal.
The end-to-end automation system of SYM is likely to help UNFI transform its distribution centers to improve efficacy and capacities, enhance order accuracy for its customers, augment storage capacity within its facilities, and support future growth. The agreement will likely enhance the accuracy, quality and speed of United Natural Foods’ supply chain, thereby taking its operations to another level.
What Else to Know?
United Natural has been benefiting from its Fuel the Future strategy, unveiled in June 2021. Fuel the Future includes six pillars, fulfill power in scale, unlock customer experience, taste the future, UNFI pride, retail optimization and earn results. Management is on track to increase market share via network optimization, solid innovation, and a better customer experience.
On its last earnings call, the company highlighted that it focuses on four areas to execute the Fuel the Future strategy and achieve its fiscal 2024 financial targets. The four priorities include a focus on delivering major value to its customers, improving the way of partnering with suppliers, providing associates with unmatched career opportunities and supporting communities and the planet. The company is focused on improving every aspect of its sales and supply chain execution to efficiently deliver products and services to customers. In this regard, the company’s one-UNFI initiative has been gaining traction.
The Zacks Rank #2 (Buy) company is on track to undertake growth initiatives under its future pillar, including brands, professional services and fresh. As part of growing its brands, management is making progress with the three-pronged strategy based on deepening its penetration with existing customers, introducing owned brands to new customers and channels and undertaking customer-friendly innovations.
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On its last earnings call, management highlighted that it continues to invest in people, technology and infrastructure to deliver fresher produce. The company is on track to expand its professional services by bringing new ideas to its customers. In this regard, the company’s retail shelf services continue to gain traction. Lastly, the company is on track to invest in its people, infrastructure and technology as part of its fresh growth pillar.
In fact, its abovementioned deal with Symbotic highlights its focus on making technology-related investments to spur growth.
Shares of United Natural Foods have slipped 2.4% in the past three months, compared with the industry’s dip of 3.1%. The company has been grappling with escalated inflation like most other food companies. Nonetheless, the abovementioned upsides, including the latest agreement with SYM keep it well placed for growth.
3 Other Stocks Worth a Look
Other well-ranked stocks from the sector are Lancaster Colony LANC, and General Mills GIS.
Lancaster Colony, which manufactures and markets food products for the retail and foodservice markets, currently sports a Zacks Rank of 1 (Strong Buy). LANC delivered an earnings surprise of 170% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lancaster Colony’s current financial-year sales and EPS suggests growth of 9.6% and 38.3%, respectively, from the corresponding year-ago reported figures.
General Mills, a manufacturer and marketer of branded consumer foods, currently carries a Zacks Rank #2 (Buy). GIS has a trailing four-quarter earnings surprise of 6.1%, on average.
The Zacks Consensus Estimate for General Mills’ current financial-year sales suggests growth of 2.5% from the year-ago reported number.
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