Natural and organic food distributor United Natural Foods has posted an 11% increase in third-quarter profits, with sales up gains in natural and conventional supermarket channels.


Earnings for the quarter ended 28 April increased to US$13.7m, up from $12.3m, during the same period last year. Revenue grew 15% to $732.5m.


Sales to supermarkets rose 23% and sales to natural food stores climbed 20%.


However, during the period, United Natural said that its margins tightened by 1.2%, largely due to inventory issues. Operating expenses rose 8% during the quarter, jumping from $97.5m last year to $104.8m this year.


Commenting on the margin erosion, CEO Michael Funk said: “We experienced some short-term erosion of gross margin during the quarter due to our forward buying of inventory remaining below historical levels and specific inventory write-offs in broadline distribution. We remain confident that the gross margin will improve over the next two quarters with these issues behind us.”

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