Leading United States independent distributor of natural, organic and specialty foods, organic produce and personal care items United Natural Foods, Inc. (Unfi) has posted a strong increase in fiscal fourth quarter net sales of 17.2% over the same period in 2010 to $1.16 billion. Annual fiscal net sales for 2011 also lifted and were 20.6% up over fiscal 2010 to $4.5 billion, the company reported..

Net income for the fourth quarter of fiscal 2011 decreased by $0.5 million, or 2.6%, to $17.2 million, from $17.6 million for the comparable quarter in fiscal 2010, primarily due to pre-tax expenses of $6.3 million recognized in connection with the previously announced restructuring of the Company's UNFI Specialty Distribution Services division (‘UNFI Specialty’), including the $5.8 million non-cash impairment charge related to the Company's Harrison, Arkansas facility and other expenses incurred in connection with the divestiture of the Company's general merchandise and conventional non-food lines of business.

Unfi said that gross margin was 18.6% for the fourth quarter of fiscal 2011, which represents a 43 basis point improvement sequentially from the gross margin of 18.2% for the third quarter of fiscal 2011. “The higher gross margin compared to the prior sequential quarter was due to purchasing and logistics efficiencies, and higher fuel surcharge revenues,” the company said.

"Fiscal 2011 was a transitional year for UNFI, as we generated over 20% sales growth, and record net income," said Steven Spinner, president and chief executive officer. "As we look forward to fiscal 2012, we plan to continue the roll-out of our new warehouse management system, while focusing on increasing service levels and operational productivity."

Net sales for fiscal 2011 totaled $4.53 billion, a 20.6% increase over the prior fiscal year. “As a result of the continued shift in customer mix, gross margin was 34 basis points lower than the comparable prior year period, at 18.2% of net sales for fiscal 2011,” Unfi said. “Gross margin was also negatively impacted during the year by start up costs related to inventory issues and incremental freight and service costs incurred during the first half of fiscal 2011 in connection with the initial period of operations of the Company's new Lancaster, Texas distribution facility, which costs were partially offset by higher fuel surcharge revenue.”

Unfi’s distribution operations are divided into six principal units: UNFI, Eastern Region; UNFI, Western Region; UNFI Canada; Albert’s Organics (fresh produce); Select Nutrition; and UNFI Specialty Distribution Services. In addition to distribution operations, UNFI's divisions include Blue Marble Brands, Earth Origins Market and Woodstock Farms Manufacturing. It distributes throughout the United States and to more than 40 other countries.